Weekly Global Events

The US government lent insurance major AIG an additional US $37.8bn. The insurer was seized last month and lent US $85bn. The company’s executives, meanwhile, got a rough ride in Congress for spending US $440,000 at a fancy resort the week after AIG was bailed out.

Bank of America reached a settlement with those states, including California and Illinois, that had brought lawsuits against the lending practices of Countrywide Financial, a beleaguered lender bought by the bank this year. The settlement rejigs the mortgages of around 400,000 homeowners and could cost up to US $8.6bn. Separately, Bank of America raised US $10bn in a share sale and said it would halve its dividend.

SAP, the world’s largest maker of software for business, said it had experienced a very sudden and unexpected drop in demand. And figures showed that the rate of growth in revenue from online advertising in the US in the first half of 2008 was considerably lower than in the same periods in 2007 and 2006. IBM, however, reported a 22% increase in quarterly profit.