US taxpayers may not be done bailing out American International Group Inc after the head of the Federal Reserve said a fourth rescue of the insurer was needed to keep the financial system from failing.

　　"We're not done with AIG by a long shot," said Phillip Phan, professor of management at the Johns Hopkins Carey Business School in Baltimore. "The problem is we still don't know the extent of the risk AIG has."

　　The rescue, which now leaves taxpayers on the hook for $163 billion at AIG, a government official said, was raised after the New York-based company reported a $61.7 billion fourth-quarter loss on March 2. AIG still has billions of dollars in unrealized losses on assets and faces declining revenue on premiums because of the slump in commercial insurance and the company's struggle to attract new business.

　　AIG was first saved in September with an $85 billion rescue, and handed over an 80 percent stake to the US government. The bailout swelled to $122.8 billion and then $150 billion as the government sought to prevent losses at banks that did business with the insurer. The bulk of AIG's losses, which totaled more than $100 billion in the past five quarters, are related to credit-default swaps sold to investors to protect them from the declining value of financial assets.

　　The insurer will probably need more government funds to cover contract liabilities and declines in asset values, according to Sean Egan, president of Egan-Jones Ratings Co in Haverford, Pennsylvania. At the end of December, AIG had $27 billion in unrealized losses on swaps, options and forward contracts and $25 billion in pretax gross unrealized losses on bonds and equity securities. Credit-rating downgrades on structured finance products may also boost losses, Egan said.(China Daily)