AIG, one of the world’s largest insurers, has asked the U.S. Federal Reserve for $40 billion in emergency loans. (CNBC story)
Credit rating agencies could downgrade AIG at any minute, which could spell its doom suggests the New York Times. AIG has been hit by $18 billion in mortgage derivative-related losses over the past three quarters.
We’re awaiting word on whether this news will affect AIG United Guaranty, Canada’s #3 mortgage default insurer.
Just 48 days ago, MGIC, another U.S.-based default insurer, withdrew from the Canadian market as its U.S. parent became entangled in its own financial turmoil. Triad Guaranty had a similar pullout earlier this year.
Hopefully AIG’s Canadian subsidiary is on more solid footing than those two. AIG is a good insurer and adds much needed competition to the Canadian market.
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