US government acquires 79.9% stake in AIG during 2008 crisis

In September 2008, amid the onset of the global financial crisis, the United States Federal Reserve executed a massive government intervention by authorizing a loan of up to $85 billion to American International Group (AIG), the world's largest insurance company.

In exchange for this support, the U.S. government acquired a 79.9% stake in AIG and obtained veto power over dividend payments. The two-year loan carried a high interest rate of LIBOR plus 8.5 percentage points and was secured by nearly all of the group's assets. This action followed the bankruptcy filing of Lehman Brothers and a liquidity crisis in the money market, specifically involving the Reserve Primary Fund.

AIG, which held approximately $1 trillion in assets at mid-2008, served millions of clients across 140 countries. While its traditional insurance sectors remained viable, the primary risk was concentrated in its AIG Financial Products division, which officials viewed as a potential systemic threat to the global economy.