The credit freeze started in August 2007 when banks became wary of lending to institutions holding securities tied to U.S. subprime mortgages. Since the start of last year, the world's biggest financial institutions have posted almost $515 billion in losses and writedowns. Eleven U.S. banks have collapsed since January.
Shares Tumble
AIG tumbled as much as 74 percent today, taking its decline this year to more than 94 percent. Standard & Poor's yesterday cut the insurer's long-term counterparty rating three grades to A-, citing ``reduced flexibility in meeting additional collateral needs and concerns over increasing residential mortgage-related losses.''
The reductions occurred after two people familiar with the situation said AIG is seeking $70 billion to $75 billion in loans arranged by Goldman Sachs and JPMorgan Chase & Co. to replenish capital. The insurer may get government assistance to avert a collapse, CNBC reported today, without saying where it got the information.
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