NY governor says economy seems headed toward crisis

NEW YORK, March 17 (Reuters) - New York Gov David Paterson on Monday said the economy seemed to be headed toward a crisis, noting Bear Stearns Co Inc BSC.N will be bailed out at 10 percent of the price it would have fetched on Friday.

The Democrat, who was sworn in on Monday, asked government and business leaders to meet with him in the coming weeks to help him "adjust our budget accordingly."

Paterson replaces Gov. Eliot Spitzer, who was forced to resign last week over a sex scandal. The new governor must close a budget gap estimated as high as $5 billion. Spitzer had proposed a $124 billion budget, but the state gets much of its tax revenue from Wall Street, which is now reeling from the subprime mortage debacle.

(Reporting by Joan Gralla, Editing by Chizu Nomiyama)