Qualified advisers answering your
Financial Questions
call 0800 092 1245

AIG bailout gives some relief to markets

News that insurance giant AIG has been bailed out by the US authorities at the final hour has given stock markets around the world a little bit of breathing space in the short term. The move, which many see as highly unusual, saw the US government affectively take control of the giant by injecting $85 billion into the company in return for a stake of nearly 80%. The two year loan allows the group to honour a whole raft of liabilities which were set to push the company into bankruptcy. So why did the Federal Bank step in?

The problem seems to have been the size and power of the former darling of the insurance industry and the affect it would have if the group was to fail. After weighing up the pros and cons it seems as though the authorities saw an $85 billion loan as the lesser of two evils - which certainly puts the situation into context!

However, there will be moves at the top within AIG as the government has made it clear that changes need to be made and heads will roll as part of the deal. Many are now asking why Lehman Brothers did not afford the same support as AIG?

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details