AIG received the largest U.S. government bailout during the 2008 financial crisis.
American International Group became dangerously exposed through its financial-products division, which sold enormous amounts of credit default swaps. These contracts provided protection against failures of mortgage-related securities. When housing markets deteriorated, AIG faced collateral demands it could not meet.
The Federal Reserve rescued AIG in September 2008 with an $85 billion loan in exchange for an approximately 79.9 percent equity interest. The total government support eventually reached roughly $182 billion. The rescue prevented an immediate disorderly collapse but provoked criticism because AIG paid bonuses and large sums to counterparties.
AIG was an insurance conglomerate, not an ordinary commercial bank. Its crisis resulted mainly from derivatives exposure and the interconnectedness of global financial markets. The government ultimately sold its AIG shares and exited the investment profitably.