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NEW YORK (Reuters) - Capping an extraordinary day in financial
markets !"#" aut$orities pieced
toget$er an emergency %&' illion rescue of insurance company
merican *nternational +roup *nc
(*+.N) to stave of a bankruptcy that could have thrown world
markets into deeper
turmoil.
*+,s rescue calls for t$e !"#" ederal Reser.e to lend up to
%&' illion to *+ for t/o years in exc$ange
for a 01"1 percent e2uity stake" *t comes 3ust t/o days after
!"#" aut$orities refused to ail out in.estment
ank 4e$man 5rot$ers 6oldings *nc (4E6"N) forcing it into
ankruptcy court despite pleas from Wall
#treet,s c$iefs"
*+ /ill pay interest at a steep &"' percentage points ao.e
t$e t$ree-mont$ 4ondon *nterank Offered
Rate making t$e current rate e2ual to aout 77"8 percent" 9$at
gi.es *+ a ig incenti.e to emark on a
massi.e asset sale program to pay ack t$e loan 2uickly"
:9$ank +od: exclaimed ;aniel uss an influential ond manager /$o
o.ersees more t$an %7@organ C$ase = Co (A>@"N)"
*+,s ailout rings to aout %0aulson and !"#" #ecurities and
Exc$ange
Commission C$airman C$ristop$er Cox"
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*+,s management /ould e replaced including C$ief Executi.e Roert
Willumstad /$o only $eld t$e
reins for t$ree mont$s a person riefed on t$e matter said"
*+
*+ faced a cas$ crunc$ after %7& illion of losses o.er t$ree
2uarters largely ecause of complex
securities t$at are tied to mortgages and /$ic$ plunged in .alue
as t$e nation,s $ousing crisis deepened"
*n.estors and credit rating agencies gre/ more doutful t$at *+
could offset its losses /it$ enoug$
capital /$ic$ ecame pro$iiti.ely costly to raise as its s$are
price plunged"
*+,s life insurance property and casualty insurance and aircraft
leasing operations are considered
$ealt$y" 9$e insurer founded in #$ang$ai &1 years ago no/
employs aout 77
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:9$is is a once-in-a-lifetime opportunity for 5arclays: 5arclays
>resident Roert ;iamond said in a
statement" :We /ill no/ $a.e t$e est time and most producti.e
culture across t$e /orld,s ma3or financial
markets acked y t$e resources of an integrated uni.ersal
ank":
9$e announcement /as notale in t$at it made no mention of t$e
future of Ric$ard uld 4e$man,s
longtime c$ief executi.e"
*n a sign of $o/ muc$ !"#" aut$orities $a.e een trying to prop
up t$e markets t$e ederal Reser.e
5ank of Ne/ York took t$e unusual step of pro.iding some %&0
illion in financing to $elp underpin trading
/it$ 4e$man units to pre.ent disruption as customers fled court
documents s$o/ed"
(dditional reporting y Aennifer lan ;ena uin >aritos$ 5ansal
Karen 5rettell ;an 5urns Kristina
Cooke @ark elsent$al Aoan +ralla #.ea 6erst-5ayliss ;aisy Ku
;a.id 4a/der C$ris #anders
+lenn #omer.ille and Aonat$an #picerF editing y Aack Reerink
@artin 6o/ell)
