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27 Feb, 2010 04:28

Bailed-out US insurance giant may need more support

American International Group (AIG), bailed out by the government with over $US 180 billion since 2008, has posted a nearly $US 9 billion loss for the fourth quarter of last year, warning it may need more government cash.

The company has tried to sell off large stakes in its insurance businesses to reduce its debt to taxpayers.

However, the huge net loss was quite an improvement in comparison with 2008, when AIG had nearly a $US 62 billion deficit.

The former head of the Federal Reserve Bank, Paul Volcker, said the reason why AIG initially faced those problems was the lack of federal and state regulation.

He said regulators completely missed out on credit default swaps that were dealt with by AIG.