Crisis of 2008
AIGFP's trading in credit derivatives led to enormous losses. These losses at AIGFP division essentially bankrupted the entire AIG operation, and forced the United States government to bail out the insurer. Under CEO Edward Liddy, the decision was made to unwind AIG Financial Product's entire book of business. Gerry Pasciucco, a vice chairman at Morgan Stanley, who was not involved with AIG FP when it made its catastrophic bets, was selected to manage the unwinding of the portfolio in October 2008, after the company had effectively failed and been taken over by the Federal Reserve.
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“The amelioration of the world cannot be achieved by sacrifices in moments of crisis; it depends on the efforts made and constantly repeated during the humdrum, uninspiring periods, which separate one crisis from another, and of which normal lives mainly consist.”
—Aldous Huxley (1894–1963)