US Gov't Bailout of AIG
By Gina Burgio
(VERICO Designer Mortgages Inc.)
Last month, the US gov't announced that it was lending US$85billion to AIG (American International Group Inc.) in exchange for an 80% equity stake in AIG. The gov't has also increased its credit to AIG by another US$38billion. The Fed is in the process of also appointing trustees to oversee the US gov't's stake. There have been mixed reactions in the marketplace regarding the US gov't taking an ownership interest AIG, the nations largest insurance company. AIG subsidiary, AIG United Guaranty, provides mortgage default insurance to lenders, including financial institutions in Canada since 2006. Canada Mortgage and Housing Corporation (CMHC), a corporation owned by the Canadian gov't, also provides mortgage default insurance to financial institutions in Canada and has been doing so su...