The Financial Crisis: What Really Happened
Bailing out a private company not under its purview, such as AIG, is both extraordinary and historic for the Federal Reserve. After all, the Fed serves two purposes: setting monetary policy, and banking supervision and regulation. The unprecedented bailout of AIG gives the government a 79.9% equity interest in the company (read government ownership of a private company). The government also bailed out Fannie Mae and Freddie Mac, two hybrid financial institutions exempt from laws that apply to other financial institutions and backed by the implicit promise of government support with taxpayers’ money (read socialistic institutions).