The global financial crisis

US government rescues insurer AIG



The US Federal Reserve has announced an $85bn (£48bn) rescue package for AIG, the country's biggest insurance company, to save it from bankruptcy.
AIG will get an $85bn loan, in return for an 80% public stake in the firm.
The rescue follows the collapse of US investment giant Lehman Brothers, which caused share prices to plummet across the world's financial markets.

Authorities are hoping the bail-out will avert the threat of a global financial meltdown.
The Fed's move is viewed by some as the most radical intervention in private business in its history and has helped fuel a tentative rally on global stock markets.
The past few days have seen dramatic events unfold in the financial world:

• The UK's top mortgage lender HBOS is in merger talks with Lloyds TSB after a steep fall in HBOS shares
• The Fed and the US Treasury say AIG's bailout will protect the interests of US taxpayers
• US interest rates have been kept on hold despite widespread calls for a cut
• Barclays says it is buying some of the core assets of US investment bank Lehman Brothers for $1.75bn (£1bn)