The Federal Reserve Board threw a life preserver to keep American International Group Inc. from drowning last night, as the Fed agreed to have the U.S. government take a 79.9 percent stake in AIG in exchange for the Federal Reserve Bank of New York providing up to $85 billion in emergency financing.

The 11th-hour deal means AIG will continue to do "business as usual," rather than have to seek bankruptcy court protection, as had been cited as the worst-case scenario, a Fed official noted.

Meanwhile, New York Insurance Superintendent Eric Dinallo confirmed that Edward Liddy, the former chief executive officer for Allstate Corp., is under consideration to run AIG's day-to-day operations as its new CEO.

Recommended For You

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.