US Federal Reserve rescues AIG

The US Federal Reserve has announced a $US$85b rescue package for AIG, the country\'s biggest insurance company, to save it from bankruptcy.



The plan involves a loan in return for an 80 per cent public stake in the company.



In a statement yesterday, the Federal Reserve said its board made the decision with the full support of the Treasury Department.



It said the secured loan included conditions designed to protect the interests of the US government and taxpayers.



The rescue follows Monday\'s collapse of US investment giant Lehman Brothers, which caused share prices to plunge across the world\'s financial markets.