Global meltdown, once in a 100 year event: Paulson

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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acknowledged that the financial crisis was caused by many factors including "government inaction and mistaken actions, outdated US and global financial regulatory systems, and by the excessive risk-taking of financial institutions."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.

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