The rescue of Bear Stearns & AIG Support of Critical Institutions: Bear Stearns and AIG In March 2008, a Fed loan facilitated the takeover of the failing broker -dealer, Bear Stearns, by the bank JP Morgan Chase. In October 2008, the Fed intervened to prevent the failure of the nation's largest insurance company, AIG AIG : In September 2008, AIG—a multinational insurance and financial services firm—faced serious liquidity problems that threatened its survival. Many losses came from the insurance it sold on bad mortgage-related securities. Because AIG was interconnected with many other parts of the global financial system, its failure would have had a massive effect on other financial firms and markets. However, AIG also owned sizable assets that could be used as collateral. To prevent its collapse, the Federal Reserve loaned AIG $85 billion, using AIG assets as collateral. Later, the Treasury provided additional assistance. The rescue of ...