AIG Drama..

Few months ago, American Insurance giant , American International Group (AIG) was in news due to huge losses they have posted in FY 08 and investments in the toxic assets which led to one of major financial crisis in the banking history. At that time, US govt. and treasury came in to the scene with their multi billion dollar rescue plan. The US treasury lend somewhat around 178bn$ to the insurance giant to prevent another major bank failure just like failure of Lehman Brothers.

But this is not the reason, that AIG is in news, they are in news beacause of their so called obligations to pay multi-million dollar bonuses to their employees. This act of AIG received huge outrage from every sector, even President Obama told his counsellors to seek for a legal way to prevent disbursement of bonuses, which is nothing but the money of taxpayers, to the same employees which are responsible for such a financial condition of AIG.

But some of the financial analysis on wall street are saying that AIG is staying with its obligation, because they want to keep their employees, because they want these employees to clean up all the mess created by them.

But whatever reason AIG give to justify their move, they are not in any position to handover money, they received from US treasury to be distributed as bonuses. Instead, they should look out for soultion to improve their market position and once this is done, they can reward their employees for much hefty bonus, but surely not this time.




Thanks&Regards,
Mohit

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