'US gov't likely to put up $85 billion to help rescue AIG'

September 17, 2008 04:18

The US government is likely to put up $85 billion to help rescue the huge insurer American International Group Inc., well informed sources said Tuesday night. If AIG fails, it could trigger a wave of problems for banks around the world and open the ugliest chapter yet of the financial meltdown that has slashed billion of dollars from global stock markets. The sources said bankers and federal officials had decided a government bailout of AIG was the best solution to save it from collapsing. The plan would call for the government to seize up to 80 percent of AIG and remove its management, similar to the way it took control of mortgage giants Fannie Mae and Freddie Mac.

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