Where AIG's new bailout ranks
AIG got another hand from the government. Here's where it fits among other government programs.
NEW YORK (CNNMoney.com) -- AIG may have gotten a $150 billion deal Monday, but that's just a small fraction of the nearly $3 trillion in financial rescue programs the government has created to stabilize the U.S. economy.
The Federal Reserve and U.S. Treasury Department officials worked with AIG executives over the weekend to restructure its original bailout deal, the core of which was a high-interest-rate loan.
The tough terms of the initial package were meant to send a message that more bailouts won't come easily.
But AIG said it would have a difficult time paying back the loan. Worried that an AIG collapse would result in a domino effect throughout the financial system and a loss of billions of taxpayer dollars, the government reworked the deal.
"Clearly there are other industries interested in accessing TARP (Troubled Asset Relief Program) funds, and the Treasury will continue to work on a strategy that will most effectively deploy the remaining funds," a Treasury official said Monday.
The Treasury has been authorized to use up to $700 billion of taxpayer funds to buy equity stakes and troubled assets from companies. It has used about $172 billion of that so far to inject capital into about 49 banks, according to analysts at Keefe, Bruyette & Woods. The Treasury also has used $40 billion to inject capital into AIG (AIG, Fortune 500).
With the possibility of more bailouts on the way, here is how the government has thus far invested billions of dollars to rescue banks, companies, consumers and their homes:
The government has taken these steps to aid financial institutions.
Term-auction facility: $1.5 trillion in loans to banks so far in exchange for otherwise unwanted collateral. The Fed increased its monthly auction limit to $300 billion in October, up from $20 billion when the Fed began the program.
Dollar swap lines: Unlimited dollars to 13 foreign central banks to provide liquidity to foreign financial institutions. The Fed lifted its cap after raising it to $620 billion in October from $24 billion in December.
Bear Stearns: $29 billion in a special lending facility to guarantee potential losses on its portfolio. With the lending facility, JPMorgan was able to step in to save Bear from bankruptcy.
Lending to banks: $77 billion lent on average every day to investment banks, after facility opened to non-commercial banks for first time in March.
Cash injections: $250 billion to banks in exchange for equity stake in the financial institutions in the form of senior preferred shares.
Mortgage-backed securities purchases: Up to $410 billion allotted to purchase troubled assets from banks.
Fed rate cuts: Down to 1% in October 2008, from 5.25% in September 2007.
Consumers are benefiting from the government's actions in recent months.
Stimulus checks: $100 billion in stimulus checks made their way to 140 million tax filers to boost consumer spending and help grow the economy.
Unemployment benefits: $8 billion toward an expansion of unemployment benefits, to 39 weeks from 26 weeks.
Bank takeovers: $13.2 billion drawn down so far from the FDIC's deposit insurance fund after 19 bank failures in 2008.
Rehab foreclosed homes: $4 billion to states and municipalities in assistance to buy up and rehabilitate foreclosed properties.
Student loan guarantees: $9 billion so far in government purchases of student loans from private lenders. Higher borrowing costs made student loans unprofitable for a number of lenders, many of whom stopped issuing the loans.
Money-market guarantees: $50 billion in insurance for money-market funds. The Fed then began to lend an unlimited amount of money to finance banks' purchases of debt from money-market funds. The Fed then agreed to purchase up to $69 billion in money-market debt directly. In October, the Fed said it would loan up to $600 billion directly to money-market funds.
Housing rescue: $300 billion approved for insurance of new 30-year, fixed-rate mortgages for at-risk borrowers. The bill includes $16 billion in tax credits for first-time home buyers. But lenders have been slow to sign on.
Deposit insurance: $250,000 in insurance for interest-bearing accounts, up from $100,000. The FDIC also issued unlimited guarantees on non-interest- bearing accounts and newly issued unsecured bank debt.
Uncle Sam has intervened to help companies in the following ways.
Business stimulus: $68 billion in tax breaks to corporations to help loosen the stranglehold on businesses trying to finance daily operating expenses.
Fannie Mae, Freddie Mac: $200 billion to bail out the mortgage finance giants. Federal officials assumed control of the firms and the $5 trillion in home loans they back.
AIG: $152.5 billion restructured bailout, including a direct investment through preferred shares, a easier terms on a $60 billion loan, and new facilities meant to take on the companies exposure to credit-default swaps.
Automakers: $25 billion in low-interest loans to speed the industry's transition to more fuel-efficient vehicles.