AIG needs a bridge loan, not a bail-out. The company faces a liquidity crisis, not a solvency problem. Its core insurance operations, both in the US and abroad, are financially sound, and it can raise more than $20bn through orderly asset sales. For these reasons, a bridge loan – from the federal government if sufficient private capital is not forthcoming – will not mean a bail-out. A temporary bridge loan will prevent further rating agency downgrades, which would require AIG to post billions of dollars in additional collateral and which would likely prove fatal.

It is true that I spent most of my adult life building AIG, but that is not why I think federal assistance, should it be necessary, is appropriate. A federal bridge loan is appropriate because it is in our national interest to save AIG. AIG operates in approximately 130 countries and has more than 100,000 employees. It provides credit protection to tens of thousands of financial institutions and other companies around the world. Its failure would pose systemic risk to the US and international financial systems.