American Insurance Group's (AIG) History
When was American International Group Inc. (AIG) founded, and where was its original headquarters?
AIG was founded on December 19, 1919, in Shanghai, China.
What was the significant turning point in the 2008 financial crisis involving AIG?
The Federal Reserve Bank of New York intervened with an $85 billion loan on September 16, 2008, to prevent AIG's collapse.
Which AIG unit played a significant role in the 2008 crisis, causing a cascading series of bank failures?
The Financial Products unit.
Who is known as "The Enabler" in the AIG scandal, and what role did they play?
Scott Alvarez is "The Enabler" in the AIG scandal.
After the scandal, what rating did AIG receive from all three credit rating agencies, and how did it impact the company?
AIG's rating was reduced to AA+ by Fitch, Moody's, and Standard & Poor's, impacting its ability to trade and requiring collateral.
In 2007, what were AIG's notable achievements in terms of its global presence and workforce?
AIG was the largest insurance company in the world, with $850 billion in assets, offices in 130 countries, and over 100,000 employees.
What was the major factor blamed for AIG's collapse in 2008, leading to a $99.2 billion loss?
AIG's credit default swaps, which cost the company $30 billion.
What bad bets on mortgages by the Financial Products unit led to AIG's downfall?
AIG made bad bets on credit swaps related to mortgage-backed securities.
Who is referred to as "The Brains" in the AIG scandal, and why?
Thomas Baxter Jr. is "The Brains" due to his significant role in the events.
In March 2009, what controversial action did AIG take regarding bonus payments?
AIG gave bonus payments of approximately $218 million to its employees in the financial services division.
What event led to AIG's significant downsizing in 2008, causing it to lose half its employees and a fraction of its market cap?
The financial crisis of 2007 and 2008, which nearly caused AIG to collapse and required a rescue by the U.S. government.
In 2005, what discovery about AIG's financials led to a falter in its pristine reputation?
Auditors found that AIG had exaggerated its profitability by $3.9 billion.
What percentage of subprime exposure was falsely advertised in AIG's CDO (mortgage-backed security)?
The CDO was advertised as having less than 10% subprime exposure, but it was closer to 80%.
What nickname is given to Sarah Dahlgren in the AIG scandal, and what was her role?
Sarah Dahlgren is "The Spin Doctor," indicating her involvement in managing public relations.
What was the cause of the American Insurance Group scandal, according to the information provided?
The cause of the AIG scandal was a lack of oversight when dealing with credit swaps, particularly in the CDOs.
Before the financial crisis, why was AIG referred to as Wall Street's "Golden Goose"?
AIG held a perfect credit rating (AAA) since the 1980s, allowing it to borrow at lower rates, invest at higher returns, and operate with less oversight.
Who was charged with personally supervising the fraudulent activities at AIG in 2005, and what fines did they eventually pay?
CEO Maurice "Hank" Greenberg was charged, and he eventually paid fines totaling $9.9 million.
When did AIG start decreasing its sales of CDOs, and why was it too late to prevent damage?
AIG started decreasing sales in 2006, but the damage had been done by then.
Who is labeled "The Misguided Risk Manager" in the AIG scandal?
Barbara-Ann Livanou is "The Misguided Risk Manager."
How did AIG's reputation suffer in 2005, and who faced legal consequences?
AIG's reputation suffered due to a $3.9 billion exaggeration in profitability, leading to legal consequences for CEO Maurice "Hank" Greenberg.
What role did AIG's subsidiaries play in the events leading up to the financial crisis, specifically in 1998?
One of AIG's subsidiaries, AIG Products, became an over-the-counter dealer of credit default swaps, using the AAA rating to its advantage.
How did the reduction of AIG's credit rating from AAA to AA+ contribute to its downfall?
The downgrade meant trading partners could require collateral, triggering events that led to the company's collapse.
How much did AIG have in CDO swaps, and how much collateral did they have during the crisis?
AIG had $79 billion in CDO swaps and no collateral during the crisis.
Who is known as "The Survivor" in the AIG scandal, and why?
Kevin McGinn is "The Survivor," highlighting his ability to endure through the crisis.
How did the financial crises of 2007 and 2008 impact AIG's global operations and financial standing?
AIG almost collapsed, leading to significant downsizing, a rescue by the U.S. government, and a drastic reduction in market cap.