CHARLOTTE, N.C. (AP) -- American International Group Inc. will be allowed to use $20 billion of assets held by its subsidiaries to provide cash needed for the troubled insurer to stay in business, New York Gov. David Paterson said Monday.

The move comes as AIG reviews its operations and discusses alternatives with outside parties, reportedly including Warren Buffett's Berkshire Hathaway Inc., to shore up its business amid concern the world's largest insurer could need billions of dollars to strengthen its balance sheet.

Paterson asked New York state insurance regulators to essentially allow New York-based AIG to provide a bridge loan to itself. The governor has also asked the head of New York's insurance department to talk with federal regulators about providing an additional bridge loan to AIG.

"AIG still remains financially sound," Paterson said.

The move will allow AIG to use those assets as collateral to borrow cash to fund its day-to-day operations, Paterson explained.

It also helps AIG by "giving them what they need most, which is time," said Keefe Bruyette & Woods analyst Cliff Gallant, who added that the relaxation of insurance regulations is "unprecedented."

Typically, a state insurance commissioner's priority is to protect the policyholder, and that includes making

NEW YORK (AP) -- Bank of America Corp. shares fell Monday after the bank agreed to buy Merrill Lynch & Co. in an all-stock deal originally valued at $50 billion.

Shares tumbled $7.19, or 21.3 percent, to $26.55. The stock has traded between $18.44 and $52.96 in the past 12 months.

Under terms of the transaction, Bank of America would exchange 0.8595 shares of its common stock for each Merrill Lynch common share.

Based on BofA's closing stock price Monday, the deal was now valued at less than $40 billion, or $22.82 a share.

Charlotte, N.C.-based Bank of America has the most deposits of any U.S. bank, while Merrill Lynch is the world's largest investment bank.

If the deal is completed, Bank of America will be able to offer Merrill Lynch's retail brokerage services to its huge customer base.

In a note to clients, Deutsche Bank analyst Mike Mayo said he sees long-term strategic advantages for Bank of America, but noted several integration risks.

"Execution risk seems high given Bank of America's decade-long struggle to improve the investment bank," Mayo said. Furthermore, Bank of America will still need to resolve Merrill Lynch's risky assets, including its

NEW YORK (AP) -- Lehman Brothers, a 158-year-old investment bank choked by the credit crisis and falling real estate values, filed for Chapter 11 protection in the biggest bankruptcy filing ever on Monday and said it was trying to sell off key business units.

The filing was made in the U.S. Bankruptcy Court in the Southern District of New York by Lehman Brothers Holdings Inc., the bank's holding company. The case had been assigned to Judge James M. Peck.

Lehman fell under the weight of $60 billion in soured real estate holdings, and the credit market's dislocation ultimately forced it to seek court protection. The credit crisis has caused global banks to write down more than $300 billion in asset value since last year, and caused the shotgun sales of Merrill Lynch & Co. and Bear Stearns Cos.

Lehman's bankruptcy filing marks the end of a Wall Street firm that started the U.S. cotton trade before the Civil War and financed the railroads that built a nation.

The company's roots began in 1844 when Henry Lehman immigrated from Rimpar, Germany to Alabama, where he established a dry goods store that catered to local cotton farmers in Montgomery. Lehman Brothers evolved from merchandising to a commodities broker, and then later into underwriting where the firm helped finance construction of the Pennsylvania Railroad, among others.

Chairman and Chief Executive Richard S. Fuld, who joined Lehman as a college student in 1969 and was the longest serving CEO on Wall Street, now has the dubious task of winding down the company's $639