More AIG Splurges: $86K Hunting Trip, Lobbyists

Geithner, Paulson face grilling over 'backdoor bailouts' for AIG clients

(NEWSER) - Two Federal Reserve governors expressed their unease about the Fed's rejection of a plan to force big banks to return $30 billion in cash they received from AIG before its bailout in late 2008. The officials warned that the decision to let the banks, including Goldman Sachs, keep the collateral they paid AIG on credit insurance contracts might be "a gift" to the firms, according to documents obtained by the New York Times. More»

(NEWSER) - These days, $85 billion just doesn't go as far as it used to. The Federal Reserve said today it will provide AIG with an additional $37.8 billion to help the beleaguered insurance giant out of its liquidity mess, Bloomberg reports. The money is on top of the massive loan it got last month. The New York Fed will provide the additional cash to AIG's life insurance subsidiaries in exchange for investment-grade, fixed-income securities. More»

Central bank's new roles stretch balance sheet to the limit

(NEWSER) - The Fed's mammoth bailout of financial firms is unprecedented in the history of the central bank, which now must play new and contradictory roles, the New York Times reports. The Fed has often been called the nation's lender of last resort—but the acquisition of AIG and holding of Bear Stears securities now also make it the investor of last resort. More»

From aircraft leasing arm to wealth management group

(NEWSER) - For one thing, the insurance behemoth the Federal Reserve just acquired for $85 billion is profitable, explains the New York Times. AIG, which started out insuring assets in Asia, is wildly diversified and sprawling globally. Businesses range from retirement plans in the US to life insurance in the Philippines to private banking in Zurich. Half of AIG's 116,000 employees are in Asia. More»

Credit default business dooms, saves giant

(NEWSER) - The Federal Reserve seemed to draw a hard line against bailouts with Lehman Bros., but just days later it stepped over that line to save AIG. Why? First, says Time: Size. Its implosion would have been "as close to an extinction-level event" as we've been since the Depression. But also: Fear. Whereas Lehman’s collapse was long expected, AIG blindsided the Fed and market participants alike. The business is so complex and mysterious, and its reach so broad, that no one was sure what its failure would mean. More»