fed takes 85% stake in AIG
17 September, 2008 § 2 Comments
woke up this morning to see everyone in the coffee shops brandishing broadsheets and scrutinising news on the dismal state of AIG. in particular i think people here are particularly concerned over the decision by the New York govenor to allow New York-based AIG to use US$20 billion of its subsidiaries assets as collateral as a bridge loan. AIG’s subsidiary, AIA, is one of the largest insurance companies here in Singapore and the risk which AIA is exposed to could potentially affect the life savings of thousands of Singapore policyholders.
breaking news from the international herald tribune reports that the fed has stepped in to provide a US$85 billion loan to AIG in exchange for a 85% stake in the company. with the collapse of lehmann brothers and the merger of Bank of America with Merill, there is no sign yet that the fed or the indeed the world has any real sustainable strategy to cope with the unfolding financial turmoil.
the full news report from the international herald tribune can be accessed here.