At the time they said that AIG's other insurance business was solid and that standard insurance policies would not be at risk if AIG crashed. This new article suggests that actually other AIG business was at risk too, meaning that insurance policies all over the world might have been at risk. IOW the bad situation described at the time actually was far worse. If this is true then IMHO these big financial institutions *do* need to be broken up until failure by one of them doesn't threaten the entire financial system that we establish and maintain for our benefit, not theirs.
"... They ne'er cared for us
yet: suffer us to famish, and their store-houses
crammed with grain; make edicts for usury, to
support usurers; repeal daily any wholesome act
established against the rich, and provide more
piercing statutes daily, to chain up and restrain
the poor. If the wars eat us not up, they will; and
there's all the love they bear us."
-- Shakespeare: Coriolanus, Act 1, scene 1
