FT.com: Lex on the AIG rescue


AIGLex reports on AIG’s rescue:

AIG was not too big to fail, but too connected. Bankruptcy would have in effect cancelled the debt insurance that AIG provided, and triggered emergency capital raisings from counterparties around the world. The Fed’s rescue is on punishing terms, AIG must repay the $85bn loan at a storecard-like 8.5 percentage points over Libor…

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