American International Group (AIG) revealed it would raise about $20bn in new capital to protect its balance sheet.

That is 60 per cent more than originally planned.

Martin Sullivan, AIGâ??s chief executive, said the insurance group had raised at least $13.5bn in recent days through the sale of common shares and equity-linked units.

They are now selling hybrid securities in dollar, euro and sterling tranches that will raise the equivalent of another $6.5bn.

The need to raise additional capital suggests possible further large writedowns.