Treasury Secretary Henry Paulson said Sunday the US government was "prepared to do what it takes" to ensure the stability of the reeling financial system. "The government is prepared to do what it takes to maintain the stability of our financial system," he said on Fox News after the Federal Reserve was forced to bail out US investment giant Bear Stearns on Friday.
"That is our priority," the former Goldman Sachs boss said, while declining to say if there were other Bear Stearns-type crises on the horizon. "I have confidence in our markets and in our financial institutions," he said.
"And there is always a decision that needs to be made and to say what's best for the stability of the marketplace, the orderliness of the marketplace. "I think we made the right decision. The Federal Reserve made the right decision here."
Paulson reaffirmed that a "strong dollar is in our nation's interest," and insisted that the US economy's "long-term fundamentals are strong." In the past year, the dollar has fallen 18 percent to record lows of nearly 1.57 against the euro as investors desert the US currency and look to greater returns and safety in the single European currency.
Paulson rejected accusations that President George W. Bush was neglecting the economy with some Democrats likening Bush to president Herbert Hoover, who led the United States into the 1930s Great Depression. "My reaction is we are all over this. The president is very focused on what's going on in the economy," Paulson said, stressing that he had been manning the phones to oversee the Bear Stearns crisis.
The Treasury chief noted that US taxpayers should start receiving rebate checks early in May under a new stimulus package pushed through Congress at the administration's urging.
"It will make a difference," he said. Battered by the subprime mortgage crisis, Bear Stearns said it had to seek an emergency loan from JPMorgan Chase backed by the Federal Reserve to avert a collapse. Bear Stearns said its liquidity position had "significantly deteriorated," sparking fears that the problems caused by the collapse of the US housing market are spreading.
Comments
Comments are closed.