In its February 26 dated presentation, marked as "strictly confidential," AIG - American International Group Inc - has sought immediate aid from the Federal Reserve and Treasury to avert its "catastrophic" disintegration, which would surely spell greater trouble for markets than the Lehman Brothers Holdings Inc. collapse last year.

Pointing to the foreseeable aftermath of its collapse, the New York-based AIG said in its 21-page draft - circulated amongst federal and state regulators - that the incident would not only cripple money-market funds, and compel European banks to raise capital; but would also result in the failure of competing life insurers, and exterminate the stake of the taxpayers in the firm.

AIG's presentation said: "What happens to AIG has the potential to trigger a cascading set of further failures which cannot be stopped except by extraordinary means. Insurance is the oxygen of the free enterprise system. Without the promise of protection against life's adversities, the fundamentals of capitalism are undermined."

Going by the AIG admonition, its collapse would hurt the global insurance industry and the value of the dollar. Moreover, it would also cultivate "doubts about the ability of the U. S. to support its banking system."

All in all, the company officials projected a series of dismal likely scenarios, thereby cautioning the regulators about a "chain reaction of enormous proportion" linked to its collapse!