US Federal Reserve Issues $85billion loan to Save AIG.
The US Federal Reserve Board has decided that the Federal Reserve Bank of New York will lend up to $85 billion to the American International Group (AIG) in a plan aimed at saving the insurer from a “disorderly failure” that could wreak economic havoc.
The Fed said in return for the loan, the government will receive a 79.9 percent equity stake in AIG.
The loan will facilitate a process under which AIG will sell certain of its businesses in an orderly manner, with the least possible disruption to the economy.
“AIG, is considering selling more than 15 businesses, including its aircra’FT’ leasing unit, a stake in a large US re-insurer and billions of dollars in properties in an effort to repay USD 85 billion government loan and secure its future as an independent company,” the ‘Financial Times’ reported.
In latest move in changing economy period, Barclays, a UK based Bank is in process of buying Lehman’s US investment banking and capital markets businesses for $250m.
I read an interesting news at CNN that shows the conversation, which appeared on “Larry King Live”.
Here Suze Orman said,
“AIG is an international giant that just doesn’t have ramifications here in the United States. It is worldwide. They’re like in 130 countries. They have 100,000 employees. Everybody has an AIG insurance policy. So in this particular case, my opinion, thank God, they bailed out AIG.”
Bailing out AIG may be helpful but this upsets Republican lawmakers. You may read what they are saying.
It’s really a crisis period for all as everyone is connected by a finance chain. What ever the outcome is will affect your personal finance directly or indirectly.
