What happens to Citigroup and AIG affiliate companies outside the US ?

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dchrys's picture
dchrys
Status: Member (Offline)
Joined: Jan 6 2009
Posts: 20
What happens to Citigroup and AIG affiliate companies outside the US ?

I happen to have accounts with Citigroup and AIG operating companies in Greece (EU). As far as I know, these companies operate under local regulations, paying taxes to local government and by checking local press, I also found out that they were profitable during 2008.

I would like to know what the impact will be for them (and eventually for their customers) in case the central US organizations go bankrupt or nationalized.

Thanks in advance.

-=dchrys=-

machinehead's picture
machinehead
Status: Diamond Member (Offline)
Joined: Mar 18 2008
Posts: 1077
Re: What happens to Citigroup and AIG affiliate companies ...

The general philosophy followed by the U.S. and European
governments has been to protect customers of financial institutions.
Only the investors -- that is, buyers of common stock, preferred stock
and bonds -- have been put at risk in the case of bankruptcy or
nationalization. While there is no guarantee, I believe these
principles will continue in force. Letting financial institutions
default on customer obligations would destroy confidence. This is what
governments are seeking to prevent with their capital infusions.

Today
Bloomberg reports that AIG will receive another U.S. bailout valued at
up to $30 billion. The story adds that the U.S. Senate’s banking
committee has scheduled a hearing
for March 5 to discuss AIG’s bailout and the government
involvement. This is Alice in Wonderland economics -- bailout first, hearing afterward. Off with their heads, say I.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajJva3aXr37w&refer=home

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