Archive for the ‘investment bank’ Category

Treasury chief defends Fed intervention

March 16, 2008

By JEANNINE AVERSA, AP Economics Writer 

WASHINGTON – Treasury Secretary Henry Paulson on Sunday defended the Federal Reserve‘s decision to help rescue Bear Stearns Cos., the teetering Wall Street investment bank. He sidestepped questions about whether other firms are on shaky ground and the possibility of addtional interventions of this kind.

Treasury Secretary Henry Paulson gestures during a news conference ...
Treasury Secretary Henry Paulson gestures during a news conference at the National Press Club in Washington, Thursday March 13, 2008.
(AP Photo/Jose Luis Magana)

At the same time, Paulson sought to send a calming message that the Bush administration is on top of the turbulent situation. “The government is prepared to do what it takes” to ease turmoil in the financial system and minimize any damage to the national economy, Paulson said during a series of broadcast interviews. The Fed’s intervention “was not a difficult decision. It was the right decision.”

The Fed, using a Depression-era procedure, raced to Bear Stearns‘ aid Friday along with JPMorgan Chase & Co. Bear Stearns had made a fortune in mortgage-backed securities but faced a possible collapse after those investments soured. Wall Street nose-dived as fears spread about whether other big firms were in jeopardy.

“When you go through a period like this,” Paulson said, “policymakers need to balance various consequences.”

 Read the rest:
http://news.yahoo.com/s/ap/20080316/ap_on_
go_ca_st_pe/paulson_credit_crisis;_ylt=A
kaY8CquJckuHd.g6Vu4M0Ss0NUE

Advertisements