Paterson: AIG Allowed to Borrow from Subsidiaries

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As the financial markets continue to roil, Governor David Paterson steps in to help ailing insurance giant AIG. WNYC's Elaine Rivera reports. In an unusual move, Paterson says he'll allow the American International Group - the world's largest insurer - to use $20 billion in its subsidiary assets to help them stay in business. Paterson emphasized that this would be at no expense to New York taxpayers. Instead, he described the action as allowing the New York-based company to give itself a bridge loan and, by extension, protect its policy holders. Like other financial firms, the company's troubles are mired in the deterioration in the mortgage and credit markets. The governor also faulted the lack of transparency in the financial industry. In the past few months, Paterson has warned that the turbulence could be devastating to the state economy in terms of less tax revenue and tens of thousands of lost jobs. For WNYC, I'm Elaine Rivera