Forget about Wall Street or some mortgage lender—American International Group is the mother of all financial crises. If this global colossus collapses, the reverberations will drown out all other failures.

With a $1 trillion balance sheet, this is the Big One.

The giant insurance company is desperately scrambling to raise cash after Standard & Poor's and Moody's Investors Service cut their ratings on A.I.G late Monday. The company has previously estimated that a rating cut means that counterparties to swaps A.I.G. sold could ask for another $14.5 billion in collateral.

Today, officials of the Federal Reserve Bank of New York have reportedly been in talks with A.I.G., Goldman Sachs, J.P. Morgan Chase, Morgan Stanley and others in an effort to persuade the two Wall Street firms to extend a $75 billion line of credit to the insurer. Earlier this afternoon, the New York Times' DealBook blog reported that the effort appeared to be faltering. CNBC says some government support may still be on the table.

Looming on the sidelines of the A.I.G., is the man who built the company into a global powerhouse, its former chif executive, Hank Greenberg. The private insurance company he runs, C.V. Starr outlined in a regulatory filing that it was considering a number of options for A.I.G., including a buyout or buying some assets.

No doubt a powerful motivating factor for Greenberg is his immense holding of A.I.G. shares, which have plummeted in value.

After falling as much as 60 percent today, the shares are trading this afternoon down about 15 percent, at $4.

If no lifeline is obtained, A.I.G. may have to file for bankruptcy protection as soon as Wednesday, the New York Times and Wall Street Journal say.

Amid the crisis, A.I.G.'s insurance business has been solid, and the fate of those businesses will be largely determined by the state regulators that have power over them.

But the real impact of an A.I.G. collapse will be in the business that got it in trouble: the insuring of derivatives like collateralized-debt obligations that were tied to mortgages through credit-default swaps. These contracts backed $441 billion of assets as of June 30. A.I.G. has recorded losses of more than $13 billion this year, largely on those swaps.

A.I.G. is a counterparty on these swaps to countless other banks, hedge funds, and other financial institutions. The unwinding of contracts by a company so interconnected as A.I.G. will unleash shock waves throughout the financial system.

 Michael Lewitt in an op-ed in the New York Times outlined the doomsday scenario:

“If A.I.G. collapsed, its hundreds of billions of dollars of mortgage-related assets would be added to those being sold by other financial institutions. This would just depress values further. The counterparties around the world to A.I.G.’s credit default swaps may be unable to collect on their trades. As a large hedge-fund investor, A.I.G. would suddenly become a large redeemer from hedge funds, forcing fund managers to sell positions and probably driving down prices in the world’s financial markets. More failures, particularly of hedge funds, could follow.”

The strains on the global financial system caused by the crisis at A.I.G. and the collapse of Lehman Brothers were evident early today. The cost of cash rose as overnight money-market rates spike up. The Federal Reserve Bank of New York, following moves by the European Central Bank and the Bank of England, pumped money into the system today to free up liquidity.

In cutting the ratings on A.I.G., the agencies cited concerns that the continued deterioration in the housing market was having an impact on A.I.G.'s capital and liquidity position.

"The main reason for the rating actions is the combination of reduced flexibility in meeting additional collateral needs and concerns over increasing residential mortgage-related losses," Standard & Poor's credit analyst Rodney Clark said. Market-to-market losses from mortgage-related investments and swap exposures have placed significant pressure on A.I.G's ability to access capital and liquidity.

And the agencies may cut ratings again.

"Further downgrades of the parent and certain operating units are likely if the immediate liquidity and capital concerns are not fully addressed," Moody's said.