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AIG gets more government aid after 100-billion-dollar loss (Roundup)
Mar 2, 2009, 15:44 GMT
New York - American International Group Inc (AIG) will get access to another 30 billion dollars in government aid to help avoid bankruptcy after the insurance giant reported a nearly 100-billion-dollar loss in 2008.
The new government cash is on top of 150 billion dollars already provided the ailing insurer in the form of loans and guarantees. The Treasury Department in a statement said AIG was simply too 'systemically important' to the financial sector to be allowed to fail.
AIG reported a loss of 99.3 billion dollars for the whole of 2008 of, including red ink of 61.7 billion dollars in the fourth quarter alone.
The fourth-quarter loss compares to a 5.29-billion-dollar loss in the same period a year earlier. The firm blamed continued severe credit market deterioration and the costs of a dramatic restructuring effort.
The Dow Jones Industrial Average plunged more than 1 per cent in morning trading Monday. US stocks last week fell to their lowest level in 12 years.
AIG insured many of the mortgage-related assets that went sour when the US housing market collapsed, and is among the biggest losers in the world financial crisis.
'Given the systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high,' the Treasury said.
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