New York — The federal government moved swiftly late Tuesday to save American International Group Inc. (AIG) with an $85 billion loan. With roughly $1 trillion in assets and a huge derivatives business, an AIG collapse could trigger the demise of other financial institutions—so-called systemic risk, say experts.

"A disorderly failure of AIG could add to already significant levels of financial market fragility," the Fed said in a prepared statement. The loan gives the U.S. government a 79.9% stake in the company.

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