Friday, May 7, 2010

Paulson: U.S. Wasn't Prepared to Deal With Meltdown

Henry Paulson said Thursday there was no plan in place for the government to deal with a financial disaster when he became Treasury secretary in 2006 but that he worked to reduce potential risks as soon as he took office.

At the same time, Paulson cautioned against overreaching on financial overhaul legislation now before Congress that he said could stifle innovation in the markets.

Paulson testfied at a hearing of a special panel investigating the financial crisis and the so-called "shadow" banking system.

"There wasn't a plan in place when I arrived," he said, adding that the system of financial regulations was marked with big gaps as complex markets proliferated outside government oversight. (more)

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