Paulson: 'I Wish' There Were Quick-Fix To Crisis
Treasury Secretary Hank Paulson just concluded a news conference, talking about the $800 billion loan fund announced by Treasury and the Fed to bolster personal credit.
"I wish, and I know you all wish, there was sort of one action we could take and the economy would turn around and the financial system would be in the kind of shape we'd like it to be in," Paulson said. "But that's not the kind of world we live in."
Paulson said it is "naive" to think the $700 billion bailout/rescue by itself would solve the nation's financial crisis.
Paulson bristled when asked by a reporter if he was simply "running out the clock" on his term as Treasury secretary.
"I am going to run right to the end," Paulson said. "If you've got any doubt about that, you're missing the point."
The secretary said that Treasury continues to have "no time line" on when or if it will ask Congress for the next installment of funds from the $700 billion government Wall Street bailout/rescue.
Paulson said today's new credit fund is only a "starting point" and it could be expanded. He added that he believes that the government conservatorship of Fannie and Freddie has "worked out."
"Today’s announcement by the Fed that it will purchase direct debt obligations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and also mortgage backed securities guaranteed by Fannie, Freddie and Ginnie Mae, underscores our support for the housing market," Paulson said. "Nothing is more important to getting through this housing correction than the availability of affordable mortgage finance."
Paulson was asked if the near-failure of Citi and required government lifeline was a repudiation of Paulson's earlier statement that the bank failures have largely stopped since Congress approved the bailout.
In fact, Paulson said, the Citi bailout is evidence that the new system is working: "We laid out a strategy that said the stability of the financial system is critical, the strength of the financial system is critical and we are able to creatively use the new authorities we've been given," he said. "That's exactly what we did in the case of Citi."
Here's the text of Paulson's remarks.
-- Frank Ahrens
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