The fall in equity prices will make some companies very vulnerable to absorption by stronger competitors. Companies “predators” have free capital and want to buy cheap shares. Therefore scared of the exchange crisis in 1987, fearing that their shares will be bought by competitors, many U.S. companies, whose share price has fallen, began a massive stock market repurchase of their own shares to preserve their independence. Among them were found even such giants as General Motors, Ford, Coca-Cola, IBM, etc. For many companies, a sharp devaluation of their shares meant bankruptcy.

Historically, two methods of regulation of the securities market were formed, by the State and by the dealers themselves. Prior to the crisis of 1929-33 the state practically did not interfere with the activities of stock exchanges. The crisis and the depression which followed it precipitated the formulation of government regulation of the stock market activities. So far, the law on securities in 1933 and a law on stock exchanges in 1934, remain the basic a document on which rests the state regulation of operations with securities.

The key idea, which was the basis of the state interference in the activities of stock exchanges, has been to maximize non-interference in the process of buying and selling stocks and bonds. A specific embodiment of this idea is found in the principle of “providing information”, on which post-crisis legislative acts are based. Their authors proceeded from the idea that, if the corporation will provide shareholders with detailed and reliable information about the activities of the company, it will automatically lead to the disappearance of the source of all evils on securities market, since the true value of stocks and bonds can be easily identified and their manipulation becomes impossible.

But from the perspective of the society as a whole, stock crisis is only a return to a level that reflects the real situation in the economy. An exchange collapse normally gives rise to the coordination of all economic policy. As a result of a crisis is temporarily restored the relative compliance of processes, occurring in the real economy and in capital formation. However strange it may seem, but in this respect, exchange crises, destroying the “excess” of financial capital, perform a constructive function. Exchange crises have accelerated the development of joint-stock form of property; increasing the concentration of financial capital in the hands of a growing part of the securities, exacerbating the competition between the holders of the shares “for survival,” lead to the bankruptcy of enterprises and banks.

Nevertheless, one can not help seeing that despite all their undeniable negative sides the crises are a prerequisite for the subsequent recovery of the economy. Stock crises, for example, lead to the replacement of backward corporations by advanced, more competitive, beat down the confusing demand for securities, remove from the securities market dealers who are prone to excessive risk, force to seek and introduce new forms and methods of operation of the exchange. (In particular, the stock market crisis of 1987, divided the western economists into supporters of two opposing points of view: some had the notion that stock markets are in need of strengthening the public management, the others remained confident that the market stabilization of the share capital may occur “naturally”, i.e. based on the natural mechanism of action within the exchange).

For small shareholders stock market crises, of course, represent a formidable threat. But rejection of the stock market on the grounds that it is inseparable from speculation and crisis, would deny the economic mechanism a flexible and effective system of capital formation, making the investment process extremely difficult. The availability of the securities market contributes to the capitalization of the income of the members of society, greatly increasing the investment resources of the economy. At the same time, which is very important, there is a real decentralization of the investment process, which gives it the flexibility and dynamism necessary for restructuring of investments.

Finally, the stock market is able to divert a significant portion of cash income of the population, thus reducing the demand for goods and services. This circumstance, which has a very mixed impact on the course of reproduction in developed capitalist countries, may have an important positive value in conditions of a scarce economy.

Banque PSA Finance SA, registered in June 2008 as the financial branch of French auto concern PSA Peugeot Citroen, is going to buy the above mentioned bank. German Deutsche Bank will be the financial consultant from the part of AIG, whereas the Russian unit of CMS will consult the French side.

Other terms of the transaction have not yet been disclosed.

It should be recalled that the net loss of AIG for the Ist quarter of 2009 decreased by 44 per cent and amounted to 4.35 billion dollars, while a year earlier the company recorded a net loss of  7.8 billion U.S. dollars. In doing so, the losses in terms of one share in the I quarter of 2009 amounted to 1.98 dollars while a year ago they were recorded at U.S. 3.09 dollars per share.

The company AIG has been one of the biggest victims of the world financial crisis. In autumn of the last year it was on the brink of bankruptcy, and the government had to actually buy back the entire company, spending tens of billions of dollars. Since then, AIG has begun to restructure, gradually getting rid of its units and moving to a less bulky structure of the company.

In April of this year AIG agreed to the sale of its insurance business named 21st Century Insurance Group to Swiss insurer Zurich Financial Services Group. Under the deal, one of the “daughters” of Zurich Financial will pay 1,9 billion dollars to AIG, of which U.S. $ 1.5 billion will be paid in cash and another 400 million dollars – in the form of debt securities guaranteed by Zurich Insurance Company, the principal operating unit of Zurich Financial.