Wracked by turmoil in the credit markets, the insurance giant posts $62 billion quarterly loss. Government amends bailout to insulate financial system.

The U.S. government, saying it needed to prevent broad damage to the financial system, announced Monday that it was again restructuring the bailout of American International Group after the battered insurer reported a staggering $62 billion quarterly loss.

Overwhelmed by ongoing deterioration in the credit markets and charges related to its restructuring, AIG’s losses overwhelmed the firm during the fourth quarter. Its $61.7 billion loss was the largest ever reported by an American company. More>>