China in auto power play
It might not shake up the industry just yet, but China's interest in Volvo and Saab is the start of something big in global autos, writes columnist Wei Gu. Commentary
AIG sees up to $8.5 billion in cash losses from CDS
NEW YORK (Reuters) - American International Group Inc (AIG.N) said on Thursday potential cash losses on its portfolio of credit default swaps tied to risky mortgage debt could be as high as $8.5 billion, much more than previously disclosed.
Under two revised ways of assessing risk, losses were estimated at $5 billion to $8.5 billion, finance executive Steven Bensinger said.
The estimates are much higher than the $2.4 billion worst-case scenario disclosed by AIG, the world's largest insurance company, in the first quarter.
Losses on CDS, which guarantee underlying debt in the event of default, drove AIG to a second-quarter net loss of $5.36 billion.
On Wednesday the company disclosed its third consecutive quarterly loss greater than $5 billion. It has recorded nearly $25 billion in unrealized losses from writing down the value of its CDS portfolio, held by a financial products unit.
(Reporting by Lilla Zuill; editing by John Wallace)
