It was a move designed to stop any further haemorrhaging of the financial sector, but it is still a case of wait and see.
The US government has bailed out the insurance giant American International Group, lending the company the equivalent of 60 billion euros, in exchange for a 79.9 percent equity stake.
The Governor of New York, David Paterson, said:
“This is good news for new York and great news for policy holders and employees around the world. Through a reorganisation and further action, jobs will be saved, businesses will be made stable and certainly our financial recovery will be easier – if not sooner.”
The bailout of AIG came just two days after the US government refused to rescue the investment bank Lehman Brothers, forcing it to file for bankruptcy despite appeals for help from Wall Street bosses.
Luxembourg’s Prime Minister, who is chairman of the euro-zone group of finance ministers, says he believes the crisis is not over yet. However, Jean-Claude Juncker says he does not believe Europe will be plunged into recession.