AIG Looks for $10B More to Pay Bad Bets

Struggling insurer gambled billions of its own money on risky derivative trades
By Jim O'Neill,  Newser User
Posted Dec 10, 2008 7:53 AM CST
The AIG logo is shown Wednesday, Sept. 17, 2008 in New York.   (AP Photo/Mark Lennihan)
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(Newser) – Insurance giant AIG, already the recipient of a $150 billion government bailout to cover soured credit-default swaps, now admits it owes some $10 billion more for speculative trades it made with its own money, reports the Wall Street Journal. Those deals aren’t covered by the bailout, leaving the struggling insurer looking for ways to cover its losses.

AIG’s financial-products unit, says the Journal, bet on speculative investments related to pools of derivatives linked to mortgage assets and corporate debt. The gambles—which have fallen in value the past few weeks—haven’t been explicitly detailed before. The Federal Reserve has no immediate plans to help AIG pay off those debts.
(Read more financial crisis stories.)