WSJ- In an effort to prop up giant insurer American International Group Inc., the Federal Reserve on Monday asked Goldman Sachs Group Inc. and J.P. Morgan Chase to help make $70-$75 billion in loans available to the company, according to people familiar with the situation.
The move came as officials on both the state and federal level scrambled Monday to help AIG find ways to come up with as much as $40 billion to help prevent a downgrade of its credit rating, an outcome that could ultimately prove fatal for the firm. It wasn’t immediately clear whether the banks would agree to the government’s request.
At a midday press conference, Treasury secretary Henry Paulson, when asked about a possible bridge loan to the firm, said the company’s meetings with federal officials had “nothing to do with any bridge loan by the government” and rather a private solution was being pursued.