Financial Times (08/19/08); McGrath, Joe
By agreeing to fund the launch of Link Loans via its Ocean Money subsidiary, American International Group is set to become the first U.S. lender to re-enter the United Kingdom's subprime mortgage market. The decision comes despite AIG declaring a second-quarter net loss of US$5.36 billion due to writedowns on risky assets. Other large banks are not expected to return to the current market, as most are continuing to pull back from their exposure to the U.K. property market, which still has not stabilized. AIG's latest venture does little to reinforce the firm's strategy of reducing core exposure to subprime activities, which it stipulated it would do in an Aug. 7 financial statement.
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