The profile of AIG American International Group (AIG) is a global insurance and financial services provider. Having been founded in 1967, it has its operations based in at least 130 nations with about 116,000 employees (Amadeo Para. 1). Its insurance products range from “general life, home, travel, business and auto insurance” (Amadeo Para. 1). Additionally, AIG leads in the provision of both retirement (including both fixed and variable annuities) and asset management services worldwide. Moreover, the company provides leasing and insurance premium finance through its Financial Services division, in addition to the “Asset Management operations providing institutional and retail asset management, broker-dealer services, and institutional spread-based investment business” (Amadeo Para. 2). Nevertheless, the company has its shares trading in New York stock exchange as well as other International countries capita l markets (AIG Website 2009). Cause of AIG bailout AIG’s collapse is said to have been mainly caused by billions of credit default swaps (CDS’s), an operation used by financial institutions but is not very common within the public domain. Credit default swaps are basically business operations that insure against defaults of bonds, corporate debt and securities that are mortgage related (Amadeo Para. 3). An increase in the mortgage-based defaults compelled AIG into raising more capital, and as most stakeholders received this information, they moved swiftly to pull out their shares. This even incapacitated AIG’s ability to cover the swaps; however, since swaps had not come due, AIG could not sell its already surplus assets to cover for them (Amadeo, 1). Among many efforts, the last attempt by AIG management was to initiate a secure lending program with other private financial institutions. However, none of the private financial institutions proved cooperative. It is at this point that the government decided to intervene (Sjostrom, 2009). Review of some Arguments for the bailout of AIG Some arguments have been put forth in support of AIG’s bailout. First, since AIG is the world’s leading insurer, its perpetual bankruptcy would have caused the economic recession experienced in the year 2008 to increase, as well as increasing interest rates (Troubled Asset Relief Program: Status of Government Assistance Provided to AIG 11). This can be viewed from the perspective that given the diversity of insurance products such as travel, home, business, among others, a time when the world was experiencing a credit crunch is when the need for these services was inevitable. Provision of auto insurance for instance is a very essential service that AIG was providing. This can be attributed to the kind of economic importance brought by the transport industry. This ranges from employment enhancement to promotion of diverse kinds of trade, both of which contribute positively to the global economy. Auto-related accidents are very common in most countries, and this calls for a reliable insurance provider. It is a fact commonly known that automobiles cannot render their services without a well spelt out insurance cover. Allowing AIG to fall could therefore also imply allowing the fall in the transport industry. Since AIG has its subsidiaries in more than 130 countries where t