Difference between revisions of "AIG"
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Revision as of 16:51, July 20, 2009
The American Insurance Group, more commonly known as AIG, is one of the largest insurance companies in the world. During the 2008 financial crisis, it was bailed out by the Bush administration and the Federal Reserve after facing the prospect of bankruptcy. The government has spent over $170 billion to shore up AIG--with more coming--because it insured big banks against losses from securities that turned out to be "toxic" and lost much of their value.
In March 2009 a firestorm of public protest exploded when it was discovered the U.S. Treasury under Secretary Timothy Geithner had given out over $160 million in bonuses for work in 2008 to the AIG traders who caused over $60 billion in losses in 2008. A law to "claw back" the bonuses by special taxes passed the House and is before the Senate. The House version applies to all bonuses by financial institutions that have received $5 billion or more in federal bailous money, which includes all the larger banks. The public outrage seriously damaged prospects for the Obama Administration's plans to ask Congress for more bailout billions.
