Who is AIG? American International Group‚ Inc. (AIG) is a leading provider of insurance and retirement solutions. Headquartered in New York City‚ AIG has principal offices for its international operations located in London‚ Hong Kong and La Defénse. AIG companies serve commercial‚ institutional and individual customers in more than 130 countries and employs 63‚000. Through its multiple company segments‚ AIG also provides services in the life insurance and retirement services industries. AIG is divided
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1. What‚ if any‚ were the relevant institutional voids in China? The relevant institutional voids for AIG in China were: 1. Macro level political and social context- media and non-governmental institutions had very little influence‚ but the government did‚ there was a political power monopoly. 2. Macro level openness of the economy – the Chinese economy lacked openness to foreign direct investment. 3. Product markets – there was weak property right protection‚ in the Chinese market there was
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Pre-September 2008: The AIG Crisis Over the years‚ AIG built upon its premier global franchises in life and general insurance by expanding into a range of financial services businesses. One of these‚ created in 1987‚ was AIG Financial Products Corp. (AIGFP)‚ a company that engaged as principal in a wide variety of financial transactions for a global client base. In 1998‚ AIGFP began to sell credit default swaps to other financial institutions to protect against the default of certain securities
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Seattle‚ Washington danryoung@netzero.net Presented the Spring Meeting of the CAS New Orleans‚ Louisiana May 6‚ 2009 The Story of the AIG Accounting Scandal The Companies The Participants Regulatory Scrutiny Intensifies The Prosecution Case The Defense Case Relevant Laws and Regulations The Fate of the Participants The Companies AIG Overview (2007) World’s largest insurance and financial services company 93‚000 employees Business in 130 countries
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Generale‚ Deutsche Bank AG and UBS AG. That’s about half the $66.7 billion that those companies‚ the five biggest beneficiaries of loans and capital infusions for AIG‚ said they spent on pay and benefits last year for employees‚ some of whom created or traded toxic subprime assets that proved deadly for lenders. The bonuses paid by AIG and the banks were allowed under a congressional exemption from compensation limits on companies getting government rescue funds. The Treasury staff requested the
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Coping with Financial and Ethical Risks at American International Group (AIG). Abstract American International Group‚ Inc. (AIG) reported bogus transactions that hid losses and inflated its net worth. AIG inflated reserve funds that were to be used for paying claims by millions of dollars and that AIG’s CEO Maurice Greenberg repeatedly directed AIG traders late in the day to buy AIG shares to prop up its price. However‚ aside from AIG’s corporate financial reporting errors or outright fraud
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The Chrysler Bailout and the Challenger Disaster are two examples of possible outcomes when implementing a strategic decision-making process. Without the presence of a decision‐making model a successful outcome is extremely unlikely. Chrysler’s decision to secure subsequent loans from the government resulted in success because it used a judgmental approach in search of a satisficing solution. In the case of the Challenger Disaster‚ the decision to launch deemed to be premature because the launch
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GENERAL MOTORS BAILOUT PROBLEM Introduction Founded in 1908‚ General Motors has been one of the largest corporation and the second largest automaker in the world coming after Toyota. For 77 consecutive years from 1931 to 1908‚ GM has been a leading automaker and marketer as ranked by the total number of units sold yearly. General motors have also been a leading employer not only in the United States but also in other parts of the world where it operates. However‚ the company has been seriously
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Coping with Financial and Ethical Risks at American International Group (AIG) 1. Discuss the role that AIG’s corporate culture played in its downfall. The corporate ethical culture at AIG was far from a good one. The corporate culture focused on high risk taking schemes that were only there to focus mostly on short-term financial gain. The AIG Financial Products unit specialized in derivatives and other complex financial contracts that were tied to subprime mortgages or commodities. While its
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effect being that something to that extent won’t be happening anytime soon. The bank bailout taught big business a lesson‚ and taught the world as a whole a lesson. The banks were in deep trouble and by the government intervening and bailing them out‚ they got the economy back up on their feet. These industries were just ‘’too big to fail.’’ Opponents like to argue that the government wasted money foolishly on the bailout however‚ according to the Center for Automotive Research‚ a Detroit-based think
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