AIG posts record loss
03-03-2009
The insurance giant American International Group has posted a US$61.7 billion quarterly loss, the biggest in corporate history, and reached a new government bailout deal after officials concluded the insurer was too big to be allowed to fail. AIG, which got $150 billion of US taxpayer aid last year, will get access to up to $30 billion of new government capital. Correspondents say the new bailout avoids for now any crippling credit rating downgrades that could force AIG to come up with billions of dollars that it might not have. "Given the systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high," the US Treasury Department and the Federal Reserve said in a joint statement. AIG, which operates in more than 130 countries, was once the world's largest insurer by market value. The quarterly loss is AIG's fifth in a row.
