Stock markets around the world crashed yesterday as American International Group (AIG), the embattled US insurer, panicked investors by announcing a loss of $61.7 billion (£44 billion), the largest quarterly loss in corporate history. The FTSE 100 tumbled 204.26 points, or 5.3 per cent, to close at 3,625, its lowest level since April 2003.The company could cost $250 billion (£178 billion) to repair, experts said yesterday as it received a further $30 billion from taxpayers via the US Government. The government has now made four separate efforts to save the company, totaling more than $170 billion. The White House dare not allow the company to fail because of the complex web of insurance and investment products that AIG sold to individuals and companies in 130 countries as it raced to become the world's largest insurer. AIG's collapse could affect 100 million Americans, according to government estimates. It is so big and sprawling, so intertwined with institutions around the globe, that its downfall could set off a vicious chain reaction. Upheaval on such a global scale would plunge the U.S. economy deeper into recession, drive up unemployment and stifle hopes for an economic rebound any time soon.
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