AIG Bailed Out By Federal Reserve
Tuesday, September 16th, 2008
It is being reported by CNBC commentator Dylan Ratigan that the Federal Reserve has agreed to extend AIG an eighty-five billion dollar “bridge loan” to assist in helping the ailing insurer avoid bankruptcy. In consideration for the capital, AIG will grant the Federal Reserve a warrant to acquire up to eighty percent of the company.
AIG, a global insurance firm with a balance sheet in excess of one trillion dollars, was on the brink of bankruptcy Tuesday as it struggled to meet short term liquidity needs. Were AIG to default many market observers and participants feared a cataclysm on Wall Street and in financial markets as AIG reaches into nearly all aspects of the financial ecosystem. Unlike other distressed financial institutions, AIG is considered to be solvent by analysts covering the company.
