Monday, September 15, 2008

Too Big to Fail?

Chalk this up to a case of moral hazard:
American International Group Inc., the insurer seeking to stave off credit downgrades, may seek help from the Federal Reserve, the Wall Street Journal said.

The insurer has turned down a private-equity investment because it would have meant turning over control of the company, the Journal said on its Web site, citing unnamed people familiar with the situation.

Presumably the Fed deal will be more favorable to AIG than the private-equity investment deal...

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