American International Group, Inc., also known as AIG, briefly experienced major financial trouble in 2008, but was reportedly bailed out by the Federal Reserve.
AIG was amongst the millions of businesses throughout the world that were directly impacted by the recession in 2008. In late 2008, AIG reportedly received a $180 billion bailout from the Federal Reserve, and was given permission to assume control. This was due to the fact that it was projected that its failure would endanger the financial integrity of other major firms that were its trading partners, such as Goldman Sachs, Morgan Stanley, Bank of America and Merrill Lynch, as well as dozens of European banks.
According to the Financial Crisis Inquiry Commissions Report in January 2011, it had been determined that AIG had failed and was rescued by the government primarily because of its enormous sales of credit default swaps, which were made without putting up the initial collateral, setting aside capital reserves, or hedging its exposure. One analyst described it as a profound failure in corporate governance, particularly its risk management practices.
As at January 2021, AIG is believed to be in good financial standing, and is said to be one of the companies that have managed to work their way out of the recession without lasting damage.