Ongoing Government Assistance for American International Group (AIG)

摘要

In the beginning of 2008, American International Group (AIG) was one of the world's largest insurers, generally considered to be financially sound with an AA credit rating. By the end of the year, it had undergone a near bankruptcy and had been forced to seek up to $173.4 billion in financial assistance from the U.S. government. The CEO had been replaced at the government's behest, executive compensation was under limits, and shareholders in AIG had been nearly wiped out as their equity was diluted by a new 79.9% stake held by the government. The government assistance to AIG has been largely ad hoc. Even though the overarching AIG holding company was regulated by the Office of Thrift Supervision (OTS), since the company was essentially an insurer it was outside of the normal Federal Reserve (Fed) facilities that lend to banks facing liquidity difficulties. AIG was also outside of the normal receivership provisions that apply to banking institutions. Had AIG not been effectively deemed 'too big to fail' and given assistance by the government, bankruptcy seemed a near certainty in September 2008.