Aig, Bank Bailout | featured news

White House Press Secretary Robert Gibbs is not a lawyer, nor does he play one on TV. So when just about every question at Tuesday's afternoon briefing concerned bonuses at insurance giant AIG, Gibbs had a non-answer at the ready. "I'm not a contracts lawyer," he said at one point, later explaining that he was "not a contract lawyer," either. When asked whether the president could simply deny more money to AIG unless it scrapped bonuses, he repeated: "Again, I'd refer you to a contract lawyer, which I'm not one."

President Barack Obama declared Monday that insurance giant American International Group is in financial straits because of "recklessness and greed" and said he intends to stop it from paying out millions in executive bonuses.

Insurance giant reveals it paid more than $75B in taxpayer dollars in the final months of 2008 to numerous banks, as well as U.S. municipalities.

The Obama administration sought to reduce the bonuses, but the insurer, which received more than $170 billion in aid, said it was obligated to pay them.

Bernanke accuses company of exploiting gaps in the system, says government 'had no choice' on bailout.

U.S. stock markets plunged by 4 percent to close at the lowest levels in nearly 12 years, igniting fresh concern over the depth of the financial crisis and where the bear market would find a bottom.

The federal government agreed Monday to provide an additional $30 billion in taxpayer money to the insurer, even as it reported the biggest quarterly loss in history.

American International Group Inc's board approved the latest overhaul of a U.S. government rescue on Sunday that includes $30 billion in new equity and other measures aimed at bolstering the struggling insurer, according to a source familiar with the matter.

American International Group Inc is close to a deal with the U.S. government that would ease the terms of its bailout, provide a further equity commitment and help it pay down debt, a person familiar with the matter said on Saturday.