New York Governor David A. Paterson Comments On The Fed’s Rescue OF AIG

Albany, NY  (CompNewsNetwork) -  "The decision tonight by the federal government to provide assistance to AIG will help stabilize our precarious financial markets during what has been a tumultuous period of uncertainty in our economy. At a more basic level, this action should be comforting news to the millions of policyholders who could have been affected by the failure of the largest global insurer.

"The deal that we have struck to stabilize AIG is the result of hard work and cooperation among officials from AIG, our own Insurance Department in New York, the Federal Reserve, the U.S. Treasury Department, and others. We should all be grateful for the leadership they have all shown in recent days to bring us to this unprecedented development.

"In the six months since I took office I have spoken repeatedly about the dire economic situation. The events of the past few days only underscore just how severe the problem is. Losses on Wall Street translate into direct losses of revenue for the State. That is the reason why I brought the New York State Legislature back in the middle of August to cut more than $1 billion over two years from our budget to close the projected deficit. Given the existing market conditions, that deficit has surely grown and we may need to call the Legislature back again, despite the progress made today.

"There is a paradigm shift that is sweeping through our nation and the globe. The failure of Lehman Brothers, Bear Stearns, and the sale of Merrill Lynch – all firms that provided huge amounts of revenue to our coffers in New York – are troubling signs about the state of our economy. There is no doubt that we must take deliberate action to ensure that we protect our solvency in the months and years ahead.

"There are many people to thank today, including Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, New York Federal Reserve Chairman Tim Geithner, and New York State Insurance Superintendent Eric Dinallo, who will chair an AIG Task Force created by the National Association of Insurance Commissioners, which will approve the sale of all AIG insurance assets. I would also like to thank New York State Deputy Secretary for Labor Charlotte Hitchcock. Many members of the State's Insurance Department were key to these negotiations, including Kermitt Brooks, First Deputy Superintendent of Insurance, Hampton Finer, Deputy Superintendent of Insurance & Chief Economist, Robert Easton, Deputy Superintendent on Insurance & General Counsel, John Kenny, Special Counsel, Michael Moriarty, Deputy Superintendent of Property and Joe Fritsch, Director of Accounting."

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