Government Announces $85 Billion Loan to Save AIG

By: Ieva M. Augstums and Stephen Bernard AP
By: Ieva M. Augstums and Stephen Bernard AP

WASHINGTON (AP) - The U.S. government has agreed to provide an
$85 billion emergency loan to rescue the huge insurer AIG, the The
Federal Reserve said Tuesday.

The Fed said the U.S. Treasury Department was in full support of the decision.

The Fed determined that a "disorderly failure" of AIG could undermine already fragile financial markets.

The government will receive an 79.9 percent equity stake in AIG, the Fed said

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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