Fed to give $85 billion loan to insurance powerhouse AIG for 80 percent stake

September 16, 2008 | Matt Marshall | Comments | |

Yep, that’s $85 billion. It boggles the mind. From the NYT:

In an extraordinary turn, the Federal Reserve was close to a deal Tuesday night to take a nearly 80 percent stake in the troubled giant insurance company, the American International Group in exchange for an $85 billion loan, according to people briefed on the negotiations.

The loan was made to stave off a spreading financial crisis, caused by complex debt securities and credit default swaps. It comes after the Fed pumped in $87 billion to pay off the loans made by Lehman Brothers.

Other banks are creaking, including Washington Mutual. Hang on tight.

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About the Author, Matt Marshall

Matt Marshall is editor and CEO of VentureBeat. Follow him on Twitter at @mmarshall, and follow VentureBeat on Twitter at @venturebeat.

  • It's a tough situation to be in for all involved. I would personally say that for the insurance industry, business and government it is a sticky situation.