HiFX: Foreign Exchange Specialists

• Headlines

September 17, 2008

With support from the U.S. Treasury Department the Federal Reserve has authorized the New York Fed. To lend up to $85 billion to AIG in the form of secured loans.  According to the Federal Reserve a “disorderly failure” of AIG could worsen financial markets, as AIG has extensive involvement in financial markets.  In return for the $85 billion loan the Fed. assumes a 79.9% stake in AIG’s equity.  Senior Fed. Officials highlighted that senior AIG management will be replaced while denying any speculation that the firm will be nationalized.  Despite the Fed’s attempt to restore investor confidence equities markets continued their recent freefall.