The Federal Government gave American International Group a bailout of $85 billion dollars, the United States government took almost 80% of the firms equity. AIG Financial Products devision has been selling insurance against investments gone wrong for years, for example, selling protection against interest rate changes or other unknown economic problems that occur. But AIG discovered a new way to make money in the late 1990’s. AIG found a new financial tool, a financial tool known as a collateralized dept obligation (CDO), it became prevalent among large institutions and large investment banks. CDO’s contain many types of debt from the very safe debt to the very risky, and collected into one bundle.
The bank name was changed to Bank of America in October 2000 (Bank of America., 2017). The revenue for the fiscal year 2016 was US$89.701 billion and the net income of the bank is US$17.906 billion. As the nation’s first coast-to-coast banking system, financial institution of the united states has greater than 5,700 retail banking offices and near 17 million ATMs that serve greater than 55 million client and small company customers. overall of 20 million, its active on line banking customer base is probable the most important of any economic facilities. 1.2 Mission and Vision of Bank of America Vision of the Bank of America is to continue to help their customers gorw and demonstrate how they can turn opportunities to reality.
Because of its strong position on online banking and mortgages originator and servicer, BofA started its mobile banking and tries to seek opportunities to capture mortgage service users by letting them to sign up mortgages through mobile. Due to financial crisis effect, many banks are facing hard times with lower number of transaction rates, and BofA is one of it. Even with the tremendous early investment spending, in year 2009, it was able to achieve $6.2 billion net income, which was considered high among bank industry. Its cost per transaction was estimated at around $0.10, but these were expected to drop to $0.03-0.04 as service get scaled and
This allowing investors and analysts who follow Boeing 's stock to imply that they wouldn’t have a problem doing this again. They can also imply the company isn’t going to change and isn’t going to be honest. The company may also lie about other problems within the business which could further hurt investors. Due to this situation investors and analysts could imply that they should start to look for other companies to invest in who have ethical practices and care for others and not just themselves. In conclusion, Boeing’s top management proved to their stakeholders that there number one priority is themselves and that they do not care about those who are investing in their
I would have also told the specific reasoning for the cost overruns and what we as a company are doing to try to fix the issue. I would try to assure the stockholders we have their best interest in mind and that they would be kept up to date on the company’s health. I feel that the investors would have had more faith in the company if we are honest with them and show that we aren’t holding any information from them even if the company did have a bad report. Releasing bad news about the company that happens much earlier in the year will make stockholders lose trust, faith and loyalty in the company which will drive the stock price down even further than if the investors found out the bad news in the first and second quarter reports. If I was chief executive of Boeing I would have told Douglas that the company is suffering cost overruns as soon as I believe it could put the deal in jeopardy, so both of our companies are on the same page and can either revise the deal or Douglas’s company can revoke the deal.
The review : Goldman Sachs- ABACUS deal In 2007 when the biggest financial crisis since the Great Depression exploded its impacts were far reached and were devastating. The crisis was caused due to the borrowers unable to refinance their mortgages. During the early 2000s the mortgages were availabe at very low interest rates due to excess credit. The interest rates reached at a historically low during mid 2000s. These loans were given against collateral that was characterized by undesirable financial metrics such as high debt-to-income ratio and low credit scores etc.
The AIG Scandal 2005 started when AIG management was issuing a press release describing its third quarter earnings in 2000 to the public. The report showed that the premium of AIG was significantly increasing, while its loss reserves was decreasing by $59 million. However, according to many industry analysts, along with the positive earnings, AIG in fact should show an increase in its loss reserves as well. This caused the investors of AIG suspected that AIG was drawing down its loss reserves to boost its profits. The suspicious of the investors has unfortunately led to the falling of AIG stock price from $99.60 to $93.30 on New York Stock Exchange (NYSE).
As the name suggests American Insurance Group was a multinational insurance company. The fraud was huge. The fraud was about $3.9 billion. The complaints were that this huge sum of money was alleged and there was also manipulation of the stock price and bid rigging. The person responsible for the fraud was the CEO, Hank Greenberg.
AIG got a credit facility of $85 billion from the Federal Reserve in exchange for warrants for a 79.9% equity stake. After that AIG has been kept afloat by more than $170 billion in federal assistance since September 2008. The uproar over AIG pay reached a new level amid revelations that it rewarded employees with $450 million in bonuses for 2008—when its stock fell from $57.14 a share to $1.57 a share. Worse, $165 million of the payments were in the form of “retention” bonuses to employees of its financial products division, which sold the complex derivatives at the heart of the company’s financial troubles. Even more ironic, 52 of the employees quit after receiving their “retention” bonuses.