Global meltdown, once in a 100 year event: Paulson
Washington,
Nov
21:
Terming
the
present
global
economic
meltdown
as
'once
or
twice' in
a
100
years
event,
US
Treasury
Secretary
Henry
Paulson
warned
that
imposing
too-strict
regulations
to
prevent
a
repeat
calamity.
Paulson
made
the
remark
at
the
last
week's
emergency
economic
summit
attended
by
world
leaders
to
begin
an
overhaul
of
the
world's
financial
regulatory
system.
With
the
next
summit
slated
for
the
spring,
the
work
on
fleshing
out
details
for
the
Herculean
task
will
fall
to
the
incoming
administration
of
President-elect
Barack
Obama
and
his
new
Treasury
secretary.
Paulson,
whose
boss
President
George
W
Bush
leaves
office
on
Jan
20,
acknowledged
that
the
financial
crisis
was
caused
by
many
factors
including
"government
inaction
and
mistaken
actions,
outdated
US
and
global
financial
regulatory
systems,
and
by
the
excessive
risk-taking
of
financial
institutions."
Still, he cautioned against the US and other countries developing a too-onerous regulatory response.
"If we do not correctly diagnose the causes, and instead act in haste to implement more rather than better regulations, we can do long-term harm," Paulson said in a speech in Simi Valley, California.
Earlier this week, lawmakers blasted Paulson for his handling of a USD 700 billion financial bailout package to help ease the crisis and restore stability and confidence to unhinged markets.
Paulson yesterday again defended his management, including his decision last week to officially abandon the original rescue strategy: buying rotten mortgages and other bad debts from banks to free up their balance sheets and get them to lend more freely.
OneIndia
News