AIG

From Recessipedia

AIG, a once prominent insurance company ^[1], suffered from a liquidity crisis when its credit ratings were downgraded below "AA" levels in September 2008 by Moody's and Standard & Poor's. This action required AIG to post additional collateral with its counterparties, standard practice for Credit-Default Swaps, a type of insurance AIG provided on collateralized debt obligations, fueling a massive liquidity crisis. ^{[2] [3]}

On September 16, 2008, the Federal Reserve instituted an $85 billion credit facility to provide liquidity to AIG and enable it to post the increased collateral obligations it required with counterparties. ^{[4] [5] [6]}

Notes

1. ↑ "AIG, What does this US Giant Do?" BBC News (March 18 2009): http://news.bbc.co.uk/2/hi/business/7621574.stm
2. ↑ Morgenson, Gretchen "Behind Insurer's Crisis, Blind Eye To a Web of Risk" New York Times (September 26 2008): http://www.nytimes.com/2008/09/28/business/28melt.html?_r=1
3. ↑ "Cheque Mate" The Economist (November 13 2008): http://www.economist.com/businessfinance/displayStory.cfm?story_id=12607251
4. ↑ de la Merced, Michael, Morgenson, Gretchen "AIG Allowed to Borrow Money From Its Subsidiaries" New York Times (September 14 2008): http://www.nytimes.com/2008/09/15/business/15aig.html?hp
5. ↑ Federal Reserve Board Press Release (September 16 2008): http://www.federalreserve.gov/newsevents/press/other/20080916a.htm
6. ↑ AIG Press Release (September 16 2008): http://ir.aigcorporate.com/phoenix.zhtml?c=76115&p=irol-newsArticle&ID=1197918&highlight=