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US expands rescue of insurer AIG | |
(20 minutes later) | |
The US government will provide an extra $30bn (£21bn) as part of a revamped rescue package for ailing insurer AIG. | |
It will also effectively cut the interest payments the insurer must pay to the Federal Reserve. | |
AIG has already received $150bn in financial support from the US government, which has an 80% stake in the insurer. | AIG has already received $150bn in financial support from the US government, which has an 80% stake in the insurer. |
The company is expected to report the biggest quarterly loss in corporate history of about $60bn later. | |
The rescue package also involves a revamp of AIG's operations. | |
In a joint statement, the Federal Reserve and the Treasury said that AIG continues to face significant challenges. | |
"The additional resources will help stabilize the company, and in doing so help to stabilize the financial system," it said. | |
AIG has received the biggest bail-out by far of any US company - much more than Citigroup, which has received $50bn, and Bank of America, which has received $45bn. | AIG has received the biggest bail-out by far of any US company - much more than Citigroup, which has received $50bn, and Bank of America, which has received $45bn. |
US officials fear that a failure of AIG would be disastrous for both the US and the global economy. | US officials fear that a failure of AIG would be disastrous for both the US and the global economy. |