Wednesday, September 17, 2008

A Really Big Shoe Drops

Fed’s $85 Billion Loan Rescues Insurer

By EDMUND L. ANDREWS, MICHAEL J. de la MERCED and MARY WILLIAMS WALSH
Published: September 16, 2008 in The New York Times

WASHINGTON — Fearing a financial crisis worldwide, the Federal Reserve reversed course on Tuesday and agreed to an $85 billion bailout that would give the government control of the troubled insurance giant American International Group.

The decision, only two weeks after the Treasury took over the federally chartered mortgage finance companies Fannie Mae and Freddie Mac, is the most radical intervention in private business in the central bank’s history.
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