More reading, the Fed and AIG

Don't forget that the Fed's own website is a valuable and very accessible resource for you.

Here are press releases on the Fed's actions this past year RE: AIG.

First, the original decision to lend $85 million to AIG. Pay attention to the reasons given at the time of the loan.

Second, the Fed and the Treasury restructured their support of AIG. The details of this are a bit technical but you can wade through it to get a general understanding.

Finally, a more definitive restructuring of that support as financial markets continued to decline earlier this year.

You can also read about the whole crisis in a pretty decent summary on wikipedia.