AIG's board of directors responded to the Federal Reserve's bailout in a statement, saying that it was the best choice for "AIG's constituencies, including policyholders, customers, creditors, counterparties, employees and shareholders."

The statement said although AIG has $1 trillion in assets the company has been facing serious liquidity problems of late, and the loan will protect AIG's customers and calm the concerns of ratings agencies.

The board of directors believes the sale of AIG's assets will be enough to repay the government loan. "In return for providing this essential support, American taxpayers will receive a substantial majority ownership interest in AIG," it read.

Finally, the report said,"Policyholders of AIG companies around the world can rest assured that AIG's commitments will continue to be honored."

By Megan Ainscow
©CEP News Ltd. 2008