article introduces credit default swaps and explores the problems of the credit derivatives. By analyzing the AIG’s bailout‚ the article describes the regulation gap in the CDS market and states the regulation reform after the crisis. Part I is background‚ generally introduces the Wall Street crisis. How it happened? What consequence it has? Part II is mainly about AIG’s CDS business: how AIG got involved in the crisis and why the biggest world insurance company suddenly collapsed. Part III is about credit
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Running head: AIG BAILOUT AIG Bailout Clari McGougan‚ Shawna Wilson‚ Keasha Kessler‚ Lashonda Edwards‚ Dale Ballard‚ and Michael Baltzelle University of Phoenix AIG Bailout The main ethics categories and theories involved in the American International Group (AIG) bailout are duty based ethics which has its pros and cons‚ and the theory is deontological which puts the rightness of an action before good. The pros of duty based ethics are equal rights are important to every person
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AIG Bailout & Stakeholder Analysis In September 2008‚ the American International Group‚ AIG‚ the largest insurance company in the United States‚ suffered from the bad debts incurred insuring mortgage-backed securities. As a result‚ within a matter of three months‚ AIG reported a startling quarterly loss of $61.7 billion‚ largest in the U.S corporate history. Instead of watching this global insurance giant fall on its keens‚ the U.S. government has decided to lend a helping hand by bailing
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A bailout could be done for mere profit‚ as when a predatory investor resurrects a floundering company by buying its shares at fire-sale prices; for social improvement‚ as when‚ hypothetically speaking‚ a wealthy philanthropist reinvents an unprofitable fast food company into a non-profit food distribution network; or the bailout of a company might be seen as a necessity in order to prevent greater‚ socioeconomic failures: For example‚ the US government assumes transportation to be the backbone of
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Abstract AIG traces its root to 1919‚ when American Cornelius Vander Starr established a general insurance agency‚ American Asiatic Underwriters‚ in Shanghai‚ China. Since then‚ an enterprising spirit‚ ingenuity‚ and tenacity have built the company into one of the world’s leading insurers. Today‚ AIG is focused on what it has been known for since the beginning: the willingness and ability to provide insurance coverage to meet the diverse needs of its clients. American International Group‚ Inc. (AIG) is
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The Demise of AIG: A Corporate Downfall Crystal Ruff Globe University ABSTRACT This paper focuses on the financial demise of AIG and the corporate culture that pushed it there. It lays out specific factors that contributed to the bailout of the company and the ethical conduct of the executives that contributed to the poor decisions that led the company to a massive failure and ultimately‚ a bailout. Even though the company is on the road to recovery‚ its reputation has been damaged and some
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[pic] THE INTERNAL CONTROLS AND FINANCIAL ACTIVITIES THAT LED TO THE BAILOUT OF OUR NATION’S LARGEST INSURANCE COMPANY By: Monte Schwartz PREFACE Anyone who watches TV has most likely seen the American International Group (hereinafter AIG) commercial with the little boy who walks into his parent’s room while they are sleeping. When his mother asks if he had a nightmare‚ he says “no” and that he’s worried about his parent’s financial future. After a twenty-second
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American International Group and the Bonus Fiasco On September 16‚ 2008 AIG suffered a liquidity crisis following the downgrade of its credit rating. In response‚ the federal government allotted AIG 85 billion in a bailout to keep the firm afloat in exchange for an equity stake in the company. In a very controversial move‚ AIG paid out more than 500 million in salaries and bonuses to senior employees after accepting the federal assistance money. This outraged the public‚ and in turn politicians
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issue in the following case – at the Example of the Bail out of General Motors by the US Government. 2. The Phenomenon A bailout is a colloquial pejorative term for giving a loan to a company or country which faces serious financial difficulty or bankruptcy. It may also be used to allow a failing entity to fail gracefully without spreading contagion. A bailout could be done for mere profit‚ as when a predatory investor resurrects a floundering company by buying its shares at fire-sale prices
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Stephanie N. Herr November 30‚ 2008 The Government Bailout‚ Who Benefits? The big three American automobile companies are showing considerable operating loses. GM is losing $1 billion or more a month. How does a capital injection help? The companies will just burn through the cash (using it to pay labor or pay off debts‚ old and new‚ until it is gone). The banks‚ on the other hand‚ that are receiving bailout funds have operating profits‚ they can borrow low and lend high‚ but suffer from
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