The U.S. government announced 85 billion U.S. dollars takeover of American International Group.

The evening of 16 Federal Reserve announced that it has authorized the Federal Reserve Bank of New York caught the edge of bankruptcy to the American International Group (AIG) to provide 85 billion U.S. dollars emergency loan. .United States Government will hold 80% stake in the group. .<P Style=MARGIN: 0px target=_blank> </ P> <P style=MARGIN: 0px target=_blank> New York-based American International Group in a statement on Business Wire platform will be based on an "orderly basis .(orderly basis) "to sell its assets, in order to repay federal loans. .And pointed out that: "the proceeds of the sale of assets sufficient to repay the loan." </ P> <P style=MARGIN: 0px target=_blank> </ P> <P style=MARGIN: 0px> integrated media, the Federal Reserve statement on the day .said, in the present case, if the laissez-faire AIG bankruptcy, on the already extremely fragile financial markets added to the misfortunes, and will greatly enhance the market's borrowing costs, further reducing U.S. household wealth, and will generate substantial economic growth .hazards. .</ P> <P> the Federal Reserve said AIG agreed to provide no more than 850 U.S. dollars in secured loans, collateral to AIG of all of the assets, the loan period of 12 months, to repay the loan all funds will come from the sale of AIG assets .U.S. government will receive AIG79.9% of the equity, which means that will take over the private insurance companies. .</ P> <P style=MARGIN: 0px> last night (September 16), Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson met with Senate Banking Committee Chairman Christopher Dodd, Senate Majority Leader Harry .Reid and House Republican leader John boehner, explain to them what the Government's election plans and progress. .According to sources, if the Fed would take holding means, the existing board of directors and its senior AIG executives are likely to be replaced. .</ P> <P style=MARGIN: 0px> </ P> <P style=MARGIN: 0px> Fed said, AIG's loan agreement the full support of the Ministry of Finance. .In addition, President Bush also supported the agreement between the Fed with AIG. .The Fed said that if AIG "disorderly bankruptcy" will make the market more vulnerable. .</ P> <P> after the government bailout, AIG's credit rating may be back, to avoid bankruptcy. .AIG shares fell 21% Tuesday, after-hours plunge of over 50% once, but the news came after the government took over, a decrease of 30% narrowing. .Since Monday, AIG lost market value of more than 250 billion dollars. .</ P> <P style=MARGIN: 0px> reluctant than before to save Lehman, the U.S. government attitudes change significantly. .Analysts pointed out that the reason why the U.S. government letting Lehman fail, but then AIG helping hand, mainly because of the global financial system which has a more important position. .</ P> <P style=MARGIN: 0px> </ P> <P style=MARGIN: 0px> AIG is the world leader in insurance and financial services with operations in more than 130 countries and regions in the world, is the leading international .Insurance services. .Bloomberg News quoted an official in the negotiations as saying the Fed had agreed to provide funding for AIG, mainly because of the group whose failure would threaten the stability of global financial markets. .And since the company is too big, can not be expected to come forward by the private sector rescue. .</ P> <P> AIG and the world's major banks have trading activities, according to Royal Bank of Scotland estimates that once the bankruptcy, other financial institutions, losses may reach 180 billion U.S. dollars. .And, once AIG bankruptcy, global stock market crash will occur on a larger scale. .</ P> <P> AIG reason suddenly caught the edge of bankruptcy, in addition to the loss by huge subprime mortgage crisis, the main but also because a number of recent credit rating agency after another sharp decline in its credit rating. .Lowered its credit rating means higher financing costs, the creditors will require the additional debt guarantees. .According to industry sources estimated that an additional downgrade means that AIG needed more than 13 billion U.S. dollars of debt guarantees, which makes the short term financial position is deteriorating rapidly. .</ P> <P> the U.S. government took over AIG, the group's creditors and the global stock market is good news, but AIG's common and preferred shareholders is bad news. .Equity has the highest priority by the Government, so the interests of other shareholders or the "bad deal." .</ P>.