85 billion loan to the American International Group AIG insurance company in

85 billion loan to the american international group

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$85 billion loan to the American International Group (AIG) insurance company in exchange for an 80 percent ownership stake, effectively giving the federal government control of the company.(6) In September, the Treasury announced a plan to provide insurance for deposits in money market mutual funds, similar to the existing insurance on bank deposits. (7) Also in September, the Fed announced that it would lend directly to corporations through the Commercial Paper Funding Facilityby purchasing three-month commercial paper issued by non-financial corporations. (8) In October, Congress passed the Troubled Asset Relief Program (TARP), under which the Treasury attempted to stabilize the commercial banking system by providing funds to banks in exchange for stock.Diff: 3 Type: ES Page Ref: 351-352Topic: Central Bank Policies during the Financial CrisisLearning Outcome: 11.6 Discuss the policies central banks used during the 2007–2009 global financial crisisAACSB: Reflective ThinkingSpecial Feature: None63

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