In the latest AIG news, unnamed sources told the Times that MetLife made a preliminary offer of $11 billion for Alico, another foreign unit of AIG, but might lower it to $8 billion, and that AXA also made a bid. But the money on the table would not be enough to make up for possibly $60 billion in fourth-quarter losses that could trigger a credit downgrade and a cascade of losses across a web of trading counterparties.

The option of the government taking direct ownership of AIG businesses would put it "in the incongruous position of owning one or more insurance companies and competing with insurers in the private sector," reports American Banker (AB) in its Morning Scan.

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