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The '''American Insurance Group''', more commonly known as '''AIG''', is one of the largest [[insurance]] companies in the world.
The '''American Insurance Group''', more commonly known as '''AIG''', is one of the largest [[insurance]] companies in the world.
==Bankruptcy==
==Bankruptcy==
It was a major player in the [[Financial Crisis of 2008]] because it sold $441 billion in unhedged and undercapitalized insurance on securitized debt, much of it tied to mortgage values. Normally an insurance company "lays off" some of the risk by taking out indurance with another company. AIG neglected to do this because it never expected the securities to turn toxic, which they did. Either someone paid the insurance or the nation's financial system would colapse, so the government stepped in, seized AIG, and paid the insurance.
It was a major player in the [[Financial Crisis of 2008]] because it sold $441 billion in unhedged and undercapitalized insurance on securitized debt, much of it tied to mortgage values. AIG sold many [[credit default swaps]]. Normally an insurance company "lays off" some of the risk by taking out insurance with another company. AIG neglected to do this because it never expected the securities to turn toxic, which they did. Either someone paid the insurance or the nation's financial system would colapse, so the government stepped in, seized AIG, and paid the insurance.
During the 2008 financial crisis, [[TARP]] funds were made available by the Bush administration and the Federal Reserve after facing the prospect of [[bankruptcy]]. The government has lent over $170 billion to shore up AIG because it insured big banks against losses from securities that turned out to be "toxic" and lost much of their value. [[Image:Bonus09.jpg|thumb|400px]]
During the 2008 financial crisis, [[TARP]] funds were made available by the Bush administration and the Federal Reserve after facing the prospect of [[bankruptcy]]. The government has lent over $170 billion to shore up AIG because it insured big banks against losses from securities that turned out to be "toxic" and lost much of their value. [[Image:Bonus09.jpg|thumb|400px]]