US federal reserve announced unprecedented loan up to 85billion USD to bail out AIG to allay fears about AIG collapsing. Earlier there were reports that Federal reserve asked two of America's banks to finance up to 70 billion USD to help AIG from being bankrupt. Had AIG went the way Lehman brothers it would have had catastrohic effect on US financial market. The news came to open after credit rating agencies down graded the credit rating of AIG.
Federal Reserve also announced that US government will have almost 80 percent of the stakes in the AIG.Every step has been taken to protect the government and the US people before entering the contract. The loan has been collateralized against all the assets of AIG. Later treasury secretary said he approved the deal. He also agreed that these are challenging times for the financial markets in America and we are with Federal reserve in its endeavor to stabilize the market.
Federal Reserve also announced that US government will have almost 80 percent of the stakes in the AIG.Every step has been taken to protect the government and the US people before entering the contract. The loan has been collateralized against all the assets of AIG. Later treasury secretary said he approved the deal. He also agreed that these are challenging times for the financial markets in America and we are with Federal reserve in its endeavor to stabilize the market.
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