AIG Financial Products

AIG Financial Products was a financial products business associated with American International Group (AIG), involved in derivatives, structured finance and related transactions. During the 2000s, it built substantial exposure to credit default swaps and other financial instruments. Those exposures became a central source of risk when the U.S. housing market deteriorated and the global financial crisis intensified, contributing significantly to AIG’s liquidity crisis and government rescue. Public sources commonly describe it as an internal business or affiliated entity of AIG rather than a consumer-facing standalone brand. The available material is insufficient to confirm its founding date, precise legal-entity history, current organizational status or detailed market footprint.

AIG Financial Products was an institutional financial business within AIG’s broader financial operations, involved in derivatives and structured finance. During the 2000s, it expanded its activity and exposure in products including credit default swaps. As the U.S. housing market weakened and the credit quality of mortgage-related securities deteriorated, counterparties demanded additional collateral, creating severe liquidity pressure. During the 2008 financial crisis, the business’s exposures became a central component of AIG’s crisis and contributed to the large-scale government rescue of the group. The business subsequently entered a period of risk reduction and run-off. Because sufficiently reliable material is not available here, this entry does not assert a specific founding year, complete legal-entity history or later organizational arrangement.

• 2008

  Risk exposure concentrated during the financial crisis

  [1]The Financial Crisis Inquiry Reportgovinfo.gov

  Risks related to credit default swaps and related structured finance transactions triggered significant collateral and liquidity pressures after market conditions deteriorated sharply, becoming a major component of the AIG crisis.

Institutional client-oriented financial derivatives and structured finance business

• Financial derivatives

  Credit default swaps

  AIG Financial Products engaged in credit default swap transactions and related arrangements for institutional clients. The business attracted extensive attention during the 2008 financial crisis because of the scale of its exposure and associated collateral risk.

• Structured finance

  Structured finance products

  The business also participated in structured finance and other complex products for institutional clients. The available material is insufficient to identify a complete product range or specific issuance dates reliably.

• 2008

  Derivatives risk during the financial crisis and AIG bailout

  AIG Financial Products' derivatives risk exposure caused massive collateral and liquidity pressures during the 2008 market crisis, and became an important backdrop for AIG's acceptance of U.S. government bailout, regulatory scrutiny, and public criticism.

  Source

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1. 1The Financial Crisis Inquiry Reportgovinfo.gov