The AIG Story (Chapter 18, Nationalization)

Maurice R. Greenberg & Lawrence A. Cunningham, THE AIG STORY, 2013

GWU Law School Public Law Research Paper No. 2013-63

22 Pages Posted: 2 Apr 2013 Last revised: 15 Sep 2014

Lawrence A. Cunningham

George Washington University

Maurice R. Greenberg

Starr International Company, Inc

Date Written: April 1, 2013

Abstract

This is the final chapter of The AIG Story, a book about the growth of a large international insurance company that pioneered the opening of new markets and helped forge milestone international trade agreements, followed by an account of its near-destruction, first at the hands of an overzealous state attorney general and underwhelming board of directors, and then, as detailed in this chapter, at the hands of federal government officials overwhelmed by a financial crisis they could not understand. This chapter begins in mid-2008, when AIG’s losing financial products bets presented the company with a huge liquidity problem, though it commanded nearly a trillion dollars in assets that made it entirely solvent. The world’s largest banks faced both liquidity and solvency problems that threatened a global financial meltdown. Swooping into the maelstrom, the U.S. Treasury and New York Fed engineered a solution that portrayed AIG as the greatest villain of the crisis and its treatment by the government as a rescue of the company. The truth is more complex and this chapter of the book explains, in what Kirkus has aptly described, reviewing the book, as “a useful contribution to the ongoing shaping of the story of the recent financial crisis.”

Keywords: financial crisis, bailout, financial regulation, Federal Reserve, Treasury Department, discount window

Suggested Citation

Cunningham, Lawrence A. and Greenberg, Maurice R., The AIG Story (Chapter 18, Nationalization) (April 1, 2013). Maurice R. Greenberg & Lawrence A. Cunningham, THE AIG STORY, 2013; GWU Law School Public Law Research Paper No. 2013-63. Available at SSRN: https://ssrn.com/abstract=2242890

Lawrence A. Cunningham (Contact Author)

George Washington University ( email )

2000 H Street, N.W.
Washington, DC 20052
United States
202-994-0732 (Phone)

Maurice R. Greenberg

Starr International Company, Inc

United States

Paper statistics

Downloads
198
Rank
124,997
Abstract Views
1,067