Insurance giant American International Group (AIG) has reported a loss of $61.7bn (£43bn) in the final three months of 2008 - the largest quarterly loss in corporate history.
The firm will receive an extra $30bn from the US government as part of a revamped rescue package. AIG has already received $150bn in financial support - the biggest bail-out by far of any US company.
The news of AIG's historic loss comes as HSBC, Europe's biggest bank, seeks to raise £12.5bn ($17.7bn) to strengthen its finances. The bank's pre-tax profits for 2008 were $9.3bn (£6.5bn), down 62% on the previous year after it wrote down the value of US assets by more than $10bn.
Stock markets worldwide slid sharply as AIG's plight underscored fears about the health of the global financial system, with the Dow Jones index falling below 7,000 points for the first time since 1997 and the UK's FTSE 100 briefly hitting a six-year low.
Stocks plunge on financial fears
US BAIL-OUTS RECEIVED:
- AIG - $180bn
- Bank of America - $45bn
- Citigroup - $50bn
- JP Morgan Chase - $25bn
- Wells Fargo - $25bn
- Goldman Sachs - $10bn
- Morgan Stanley - $10bn
- State Street - $3bn
- Bank of New York Mellon - $3bn
According to the Federal Reserve and the Treasury, AIG posed a "systemic risk" to the global financial system. AIG has 30 million US policy holders and besides sponsoring Manchester United, it plays a vital role in insuring risk for financial institutions around the world. Quite simply, it's too big a company for the American government to let it fail.
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