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US expands rescue of insurer AIG AIG reports record $61.7bn loss
(20 minutes later)
The US government will provide an extra $30bn (£21bn) as part of a revamped rescue package for ailing insurer AIG. Insurance giant AIG has reported a loss of $61.7bn (£43bn) in the final three months of 2008 - the largest quarterly loss in US corporate history.
It will also effectively cut the interest payments the insurer must pay to the Federal Reserve. And the firm will receive an extra $30bn from the US government as part of a revamped rescue package.
AIG has already received $150bn in financial support from the US government, which has an 80% stake in the insurer. The new measures will also effectively cut the interest payments the insurer must pay to the Federal Reserve.
The company is expected to report the biggest quarterly loss in corporate history of about $60bn later. AIG has already received $150bn in financial support - the biggest bail-out by far of any US company.
The rescue package also involves a revamp of AIG's operations. The revamped rescue package also involves a restructuring of AIG's operations.
In a joint statement, the Federal Reserve and the Treasury said that AIG continues to face significant challenges.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. "The additional resources will help stabilise the company, and in doing so help to stabilise 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. The AIG financial support is about three times greater than that given to 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.