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Insurer AIG set for record loss US expands rescue of insurer AIG
(20 minutes later)
US insurance giant AIG is set to report the biggest quarterly loss in corporate history of about $60bn (£42bn). The US government will provide an extra $30bn (£21bn) as part of a revamped rescue package for ailing insurer AIG.
The US government is also expected to provide an extra $30bn in financial support for AIG to avert bankruptcy. 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 rescue package will also involve a revamp of AIG's operations, which could see the firm broken up completely. 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.