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| AIG reports record $61.7bn loss | AIG reports record $61.7bn loss |
| (10 minutes later) | |
| Insurance giant AIG has reported a loss of $61.7bn (£43bn) in the final three months of 2008 - the largest quarterly loss in corporate history. | Insurance giant AIG has reported a loss of $61.7bn (£43bn) in the final three months of 2008 - the largest quarterly loss in corporate history. |
| And the firm will receive an extra $30bn from the US government as part of a revamped rescue package. | 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 - the biggest bail-out by far of any US company. | AIG has already received $150bn in financial support - the biggest bail-out by far of any US company. |
| Stock markets slid sharply as AIG's plight underscored fears about the health of the global financial system. | Stock markets slid sharply as AIG's plight underscored fears about the health of the global financial system. |
| The Federal Reserve and the Treasury said that AIG posed a "system risk" to the global financial system. | The Federal Reserve and the Treasury said that AIG posed a "system risk" to the global financial system. |
| "The potential cost to the economy and the taxpayer of government inaction would be extremely high," they said. | "The potential cost to the economy and the taxpayer of government inaction would be extremely high," they said. |
| BAIL-OUTS RECEIVED AIG - $180bnBank of America - $45bnCitigroup - $50bnJP Morgan Chase - $25bnWells Fargo - $25bnGoldman Sachs - $10bnMorgan Stanley - $10bnState Street - $3bnBank of New York Mellon - $3bn | |
| "The additional resources will help stabilise the company, and in doing so help to stabilise the financial system." | "The additional resources will help stabilise the company, and in doing so help to stabilise the financial system." |
| As well as insuring households, AIG plays a key role in insuring risk for financial institutions around the world. | As well as insuring households, AIG plays a key role in insuring risk for financial institutions around the world. |
| The news of AIG's historic loss comes as HSBC, Europe's biggest bank, seeks to raise £12.5bn ($17.7bn) to strengthen its finances following a 62% fall in annual profit. | The news of AIG's historic loss comes as HSBC, Europe's biggest bank, seeks to raise £12.5bn ($17.7bn) to strengthen its finances following a 62% fall in annual profit. |
| Revamp | Revamp |
| The revamped rescue package also involves a restructuring of AIG's operations. | The revamped rescue package also involves a restructuring of AIG's operations. |
| It calls for the Federal Reserve to take stakes in two of AIG's international units in exchange for reducing AIG's debt. | It calls for the Federal Reserve to take stakes in two of AIG's international units in exchange for reducing AIG's debt. |
| The new measures will also effectively cut the interest payments the insurer must pay to the Federal Reserve. | The new measures will also effectively cut the interest payments the insurer must pay to the Federal Reserve. |
| 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. | 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. |
| Fear of failure | Fear of failure |
| 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. |
| Credit rating agencies, such as Moody's, Fitch and Standard & Poor's, had been poised to cut AIG's credit ratings as a result of the record loss. | Credit rating agencies, such as Moody's, Fitch and Standard & Poor's, had been poised to cut AIG's credit ratings as a result of the record loss. |
| AIG: QUICK FACTS 30 million US policy holdersOperates in 130 countriesProvides insurance to 100,000 companies and other entities | AIG: QUICK FACTS 30 million US policy holdersOperates in 130 countriesProvides insurance to 100,000 companies and other entities |
| That could have forced AIG to default on its debt, which would have had a knock-on effect on all of AIG's businesses. | That could have forced AIG to default on its debt, which would have had a knock-on effect on all of AIG's businesses. |
| AIG provides insurance protection to individuals, small firms, municipalities, personal pension plans and major US listed companies. | AIG provides insurance protection to individuals, small firms, municipalities, personal pension plans and major US listed companies. |
| It also insures major financial institutions against complex deals going wrong through derivative contracts such as credit default swaps - the main cause of its problems. | It also insures major financial institutions against complex deals going wrong through derivative contracts such as credit default swaps - the main cause of its problems. |
| The company first received financial assistance from the state in September in the wake of Lehman Brother's collapse. | The company first received financial assistance from the state in September in the wake of Lehman Brother's collapse. |
| In the UK, AIG is best known as a sponsor of Manchester United, but the deal is due to come to an end. | In the UK, AIG is best known as a sponsor of Manchester United, but the deal is due to come to an end. |
| It also underwrites insurance sold by a number of High Street names including Boots and Argos. | It also underwrites insurance sold by a number of High Street names including Boots and Argos. |