Feb. 15 (Bloomberg) -- New York Governor Eliot Spitzer said bond insurers must obtain capital within days, and that he will step in if financial institutions fail to deliver a rescue plan.

``If these transactions aren't going to happen, then we need to act quickly,'' Spitzer said in a Bloomberg Radio interview today. ``The consequences are enormous and harm to investors and the marketplace will be enormous'' in the absence of a plan, he said.

Regulators are pushing companies to raise $15 billion of capital to avert rating downgrades on MBIA Inc. and Ambac Financial Group Inc. that would throw doubt on the credit quality of $1.2 trillion of debt they insure. Regulators are considering splitting the bond insurers to protect their municipal bond businesses from losses linked to subprime mortgages.

Spitzer and other regulators testified yesterday at a hearing of the House Financial Services subcommittee on capital markets.

New York Insurance Department Superintendent Eric Dinallo began talks with banks, private-equity firms and sovereign wealth funds. The bond insurers probably need about $5 billion and a line of credit for $10 billion, Dinallo said in an interview yesterday.

``We are encouraging them to resolve these transactions quickly within a finite number of days,'' Spitzer said. ``Most conversations are with financial institutions who have the greatest exposure and the greatest interest in getting capital into those companies,'' he said, adding that he wouldn't turn away other sources of funding.

``We haven't expressed concern about the source of capital,'' Spitzer said ``It's capital, it's good money, there's no opposition on my part.''

Moody's Investors Service said it plans to complete its review of Armonk, New York-based MBIA and Ambac of New York by the end of the month.

To contact the reporter on this story: Cecile Gutscher in London at cgutscher@bloomberg.net

Last Updated: February 15, 2008 08:06 EST