The US Federal Reserve announced yesterday that in the case of any further liquidity squeeze, it has authorized a new US $37.8 billion cash infusion into troubled insurance giant AIG, reports China Securities Journal.

To stave off collapse, AIG was granted a loan facility of US $85 billion from the American government in mid-September, but the price was that the government took 80% of its shareholding, and officially nationalized the global insurance giant.

According to the latest statement, the New York Fed will borrow up to US $37.8 billion in investment-grade, fixed-income securities from AIG in return for cash collateral. The Federal Reserve stated that this new plan will supplement the liquidity of AIG and help it settle payments to its counterparties.

For more details, please read the complete story in Chinese:

(http://paper.cnstock.com/paper_new/html/2008-10/10/content_65618261.htm)

(China.org.cn by Fan Junmei, October 10, 2008)