Insurance giant AIG teetered on the brink of catastrophe last night as ratings agencies downgraded the beleaguered firm's credit ratings, forcing it to raise $14.5 billion to meet debt obligations, reports the Wall Street Journal. Federal Reserve officials were holding emergency talks with Goldman Sachs and JPMorgan Chase in an effort to assemble a $75 billion line of credit to avert a crisis.
If the firm doesn't secure financing by tomorrow, it may be forced to declare bankruptcy. "The situation is dire," said a source close to AIG. The latest financial disaster if bound to exacerbate a mounting worldwide economic calamity, and severely tests government abilities to contain it.