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Famous Corporate Bailouts
By siliconindia
AIG
American International Group was bailed out by the Federal Reserve after a credit-liquidity facility was created to allow AIG to draw upto $85 billion. The economic downswing, which swept the global financial markets, pushed AIG, the largest insurance company in the world, towards bankruptcy. In early November, the U.S. Treasury announced to purchase $40 billion in the newly issued preferred stock. The Federal officials claimed that the investment would reduce the total exposure to AIG from $152 billion to $112 billion. AIG went into controversy post the bailout as officials stated that the benefits of the bailouts went to the banks, while the taxpayers had to suffer the costs.
