AIG posted a quarterly loss of $62 billion today—the largest in American history—following news that Washington will provide an additional $30 billion in cash to the insurer and loosen the terms on previous loans. The Treasury and Fed have now intervened four times to prop up AIG, reports the Washington Post. Once again, federal officials said they had no choice but to save the company, fearing global upheaval if it failed.
The government's lending to AIG far outstrips rescues for Citigroup, Bank of America, and other bailed-out institutions. Today's deal is a nearly complete reversal of last September's effort; instead of acting as a short-term lender at high rates, now the government is wiping out interest and receiving preferred shares. The Treasury is expected to continue offering support for AIG to help the company shrink and sell off some of its businesses.