Article published on the 2008-09-17 Latest update 2008-09-18 09:53 TU
Despite the bail-out, hundreds of people flooded subsidiares of AIG in Taiwan and Singapore, many of them hoping to end their policies or get cash loans.
Asian stocks closed mixed, with Hong Kong and Shanghai down on uncertainties about the US financial crisis. Europe's markets are also erratic.
Russia's two leading stock markets suspended trading for the second day running, as shares hit a new low in a decline which started with the conflict in Georgia.
The AIG deal gives the US government a 79.9 per cent stake in the company. The loan is set at a high interest rate and the Fed has the right to take over all the company's assets if it fails to repay.
AIG's collapse would have had international repercussions, British-based economist Bob McKee.
"As we know, the banking sector is in big trouble and they’re defaulting on a lot of the debt and that’s been insured by AIG and now they’re facing huge payments out, particularly to European banks," he told RFI. "So, if they’d defaulted, it would have had repercussions around the world, not just in America, and who knows where that would have led?"
A statement from US President George Bush expressed support for the agreement, saying that it was made "in the interest of promoting stability in financial markets and limiting the damage to the broader economy".
But Democrat House Speaker Nancy Pelosi called the move "our nation's largest bailout ever."
"An 85-billion-dollar loan is a staggering sum and is just too enormous for the American people to bear the risk," she said in a statement. "Congress will demand answers to prevent this from happening again."
The loan comes a day after the failure of investment giant Lehman Brothers and the sale of Merryl Lynch, which the Fed did not intervene to prevent.
British bank Barclays Wednesday announced that will take over Lehman Brothers' North American investment banking and capital markets business, along with its New York headquarters and two data centres.
The total deal is worth 1.2 billion euros. Barclays refused a merger offer at the weekend.
Shares in the top British home-loan lender HBOS hit turbulence on Wednesday, prompting the financial regulator to reassure investors that it is "a well-capitalised bank that continues to fund its business in a satisfactory way".