Sep 16, 2008 10:54 am US/Eastern
Gov. Paterson Says AIG Should Get Emergency Relief
'State Laws, Policies Need To Be Changed To Allow $20 Billion Access'
NEW YORK (CBS) ―
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New York Gov. David Paterson says state laws and policies need to be changed to allow American International Group Inc. to access $20 billion of subsidiary money to pay for day-to-day operations. (File)
AP
New York Gov. David Paterson says state laws and policies need to be changed to allow American International Group Inc. to access $20 billion of subsidiary money to pay for day-to-day operations.
Paterson said on a news network on Tuesday that AIG officials should get emergency relief so employees and investors that depend on the world's largest insurer aren't hurt more.
The Democrat says Tuesday that AIG officials are meeting with officials from the New York Insurance Department and the Federal Reserve.
Shares of AIG are falling sharply as investors grow increasingly pessimistic the company will find funding to avoid a liquidity crunch that could touch off even more global financial turmoil.
Stocks extended their decline and bond prices jumped Tuesday, a day after Wall Street's worst session in years, as nervous investors grappled with concerns about insurer American International Group Inc. and awaited the Federal Reserve's decision on interest rates. The Dow Jones industrial average traded in a wide range, sometimes dropping more than 100 after a 500-point slide on Monday.
Worries about AIG's well-being have intensified after several ratings agencies reduced their ratings on the company. Lower ratings can add to the amount of money the already cash-strapped company has to set aside. Investors are fearful that a failure by the world's largest insurer would touch off a wave of financial turmoil. AIG fell $2.38, or 50 percent, to $2.38.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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