Tech & Biz

AIG Bailout Grows to $150 Billion

by Jon Azpiri | November 10, 2008 at 10:58 am

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Struggling insurance giant AIG will be receiving even more bailout money from the US government. The government is now expected to provide up to $150 billion for the ailing insurer, about $27 billion more than originally planned. In September, the government gave $85 billion and offered an additional $37.8 billion less than a month later.

The Treasury Department will also pay $40 billion for an additional 2 percent stake in the company.

Senior Federal Reserve officials Monday said the new federal aid package is the ideal way they would have wanted to help the ailing firm. However, in September, when they initially agreed to throw AIG an $85 billion lifeline, the new $700 billion bailout program had not been enacted. Injecting capital into AIG, which the Treasury is authorized to do under the new government bailout program, is a much better way to stabilize a faltering company than just providing a loan, the Fed officials said.

Meanwhile, Treasury officials said a representative from President-elect Barack Obama's team was briefed about the restructuring Sunday night.

The government's rescue plan is the largest ever bailout of a single company and could leave the US exposed to billions of dollars in losses.

AIG shares rose more than 10 percent on today's news. Still, AIG stock is down more than 90 percent over the last five years.

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Barbara McPherson

at 11:24 on November 10th, 2008

The amounts of money involved are too large to get my mind around.

corbinse

at 18:06 on November 10th, 2008

you have got to be ^%&^%& me.. as Barbara has stated To wrap your mind around these amounts ... for starters the 750 billion bail out would provide every adult (not even TAX paying) citizen 2500$ in extra cash .. or 2 apple air fully loaded for every child enrolled in an school ... including kindergarten in America ... These are number I have heard and or read in the last few months.. when is the hemriging (spelling??) of our taxes going to stop???

Rachel Nixon

at 18:42 on November 10th, 2008

It is an extraordinary amount. One question I would ask (which I do not know the answer to, I should say) is what would the financial impact to the US be if AIG were not bailed out?