As the next Wall Street disaster lurches toward zero, Bank of America’s CEO Ken Lewis acknowledges on CNBC that an AIG failure could be disastrous:
“I don’t know of any major bank that doesn’t have exposure to AIG,” he said.
So does this mean the Fed is going to give AIG the $40 billion bridge loan it needs? Let’s hope not.
The market’s relatively muted reaction to the Lehman bankruptcy shows that Chapter 11 works. There is no panic. There hasn’t even been a market crash.
AIG is important, but the government was wise to draw the line in the sand.
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