AIG Financial Products
AIG Financial Products Corporation. (AIGFP) is a subsidiary of the American International Group, headquartered in Fairfield, CT, with major operations in London, it is currently in the process of winding down all of its operations. The collapse of AIG Financial Products is considered to have played a pivotal role in the global financial crisis of 2008–2009. In the Spring of 2008 AIGFP suffered enormous loses from credit default swaps that it issued and traded. When these credit default swaps were issued in years prior the management of AIGFP believed they would only have to pay out very few, if any of the swaps. However as the financial crisis worsened during early 2008 many companies began to default on their debt, forcing AIGFP to assume losses greater than what was ever anticipated.
The losses at AIGFP caused credit agencies to downgrade the credit rating of the entire AIG corporation in September 2008. The resulting liquidity crisis essentially bankrupted all of AIG. Many believed that AIG was too big to fail and that an AIG bankruptcy could cause an already fragile financial system to collapse, prompting the Federal Reserve Bank to extend an $85 billion line of credit to AIG. As a result the Federal Reserve was issued a stock warrant for 79.9% of the equity in AIG, effectively nationalizing the world's largest insurer. Shortly after, then treasury secretary, Henry Paulson announced the treasury's desire to break up and liquidate most of AIG. The company has since been selling off many of its subsidiaries in order to raise the cash necessary to pay back the Federal Reserve. AIG is currently in the process of closing AIGFP.
Other articles related to "aig, financial, product":
... In March 2009, AIG announced that they were paying $165 million in executive bonuses ... Total bonuses for the financial unit could reach $450 million and bonuses for the entire company could reach $1.2 billion ... President Barack Obama, who voted for the AIG bailout as a Senator responded to the planned payments by saying "t's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 ...
... AIG) arising out of AIG’s offer and sale of an earnings management product.” The company “agreed to pay a total of $126 million, consisting of a penalty of $80 million, and disgorgement and prejudgment interest ... two former top Kmart executives for misleading investors about Kmart's financial condition in the months preceding the company's bankruptcy.” On ... Commission “announced settled enforcement proceedings against American Express Financial Advisors Inc ...
Famous quotes containing the words products and/or financial:
“It seemed there was a sort of poisoning, an auto-infection of the organisms, so Dr. Krokowski said; it was caused by the disintegration of a substance ... and the products of this disintegration operated like an intoxicant upon the nerve-centres of the spinal cord, with an effect similar to that of certain poisons, such as morphia, or cocaine.”
—Thomas Mann (18751955)
“A theory of the middle class: that it is not to be determined by its financial situation but rather by its relation to government. That is, one could shade down from an actual ruling or governing class to a class hopelessly out of relation to government, thinking of govt as beyond its control, of itself as wholly controlled by govt. Somewhere in between and in gradations is the group that has the sense that govt exists for it, and shapes its consciousness accordingly.”
—Lionel Trilling (19051975)