Hank Paulson

  • 1970-1972 - Staff Assistant to the Assistant Secretary of Defense at The Pentagon[13-wikipedia]
  • 1972-1973 - assistant to John Ehrlichman, White House Domestic Affairs Advisor for President Nixon
  • 1974-2006 - Goldman Sachs
  • 2006-2009 - Secretary of the Treasury, July 10, 2006 – January 20, 2009
  • 2008 03 - DOTT- Blueprint for Modernized Financial Regulatory Structure, Department of the Treasury, Hank Paulson - 212p
  • 2008 0710 - GOV (House) - Systemic Risk and the Financial Markets, (CSPAN) Transformation of Financial Markets, Barney Frank (D-MA)  ---  [BonkNote]
    • [PDF-86p, VIDEO-CSPAN] 
    • Hank Paulson - Secretary of the Treasury, Ben Bernanke
    • 1:17:30 - Hank Paulson - need resolutions authority like FDIC
  • 2008 0731 - Markets and The Economy - Hank Paulson, Secretary of the Treasury, Exchequer Club of Washington, D.C - [VIDEO-CSPAN]
  • 2008 0917 - WSJ - Paulson’s Statement on Fed’s Actions Surrounding AIG - [link]
  • 2008 0921 - Meet the Press - Treasury Secretary Henry Paulson - [link]
  • 2009 0716 - GOV (House) - Bank of America and Merrill Lynch: How Did a Private Deal Turn Into a Federal Bailout? Part III - [PDF-212p,  CSPAN-VIDEO]
  • 2010 0127 - GOV (House) - The Federal Bailout AIG
  • 2010 - Book - On the Brink: Inside the Race to Stop the Collapse of the Global Financial System, by Henry M. Paulson 
  • Meet the Press
  • Face the Nation
  • 2010 0127 - GOV (House-OGR) - The Federal Bailout AIG, Edolphus Towns (D-NY)  ---  [BonkNote]
    • (p152) - Cliff STEARNS (R-FL).
      • Now, recently Michael McRaith, who is director of the National Association of Insurance Commissioners, told the Senate Banking Committee, he said, you know, if AIG had gone in bankruptcy, we would have taken care of it.
      • It would have been an orderly disposition.
        • This is what he said: ‘‘AIG’s insurance operations and their other companies would have simply—we would have simply bought up AIG’s insurance assets, allowing a seamless delivery of AIG’s insurance obligations.’’
        • [Bonk: Where did Michael McRaith say this?]
      • So the question is, considering that the State Insurance Commissions would likely have seized AIG’s insurance subsidiaries, protected policyholders in an AIG bankruptcy, why was it necessary to bail out AIG with taxpayers’ money, based upon the testimony of the director of the National Association of Insurance Commissioners?
    • Hank PAULSON. I respectfully disagree with him, and I believe that it is——
    • Mr. STEARNS.
      • So you disagree with this guy, with all his knowledge, his years of experience?
    • Mr. PAULSON.
      • I will just say many people with years of experience had some regulatory responsibilities with regard to AIG, but this company was had a huge problem, and it is case No. 1 on what is wrong with our regulatory system.
      • There was no single regulator that had a line of sight on the total company.
      • So there were regulators that looked at different pieces of it, and if the company had gone down, it would have been a huge mess. (p152)
  • (AIG) ...  Very much a hedge fund on top of insurance companies. 
    • Something like this, in my judgment, should never have happened.
  • ...
  • But again, we did this to protect the taxpayer, and this was--and it's something we're going to need to deal with in the future in terms of a regulatory system.

2008 0921 - Meet the Press - Treasury Secretary Henry Paulson - [link]

  • Secretary Hank Paulson
    • 2010 - Book - On the Brink: Inside the Race to Stop the Collapse of the Global Financial System, by Henry M. Paulson
      • AIG's case the problem wasn't capital—at least we didn't think so at the time.
    • 2018 - CNBC - Former Treasury Sec. Paulson On The 2008 Crisis, Moderator: Andrew Ross Sorkin - [VIDEO-YouTube]
      • 10:48- 11:40 - Hank Paulson:
        • AIG was a dramatically different situation than Lehman Brothers. 
        • We had a situation with AIG where the market perception was that there was this liquidity problem... a serious one at the Holding Company, but that the insurance companies were well capitalized. 
          • They had independent ratings. And that they were solid.
          • And the Fed was able to make a loan looking at them as collateral. 
        • And so, the Fed made this judgement. I'm not saying that it was an easy judgement for them, but they made the judgement where the collateral was good. 
        • ⇒  And what was more important, in my judgement, is that the market accepted it.  
  • (p71) - Marcy KAPTUR (D-OH) - Oh, they are happening, Mr. Paulson. You ought to come and visit us in Ohio and see the results of your handiwork.
  • Hank PAULSON. Well, I know how terrible it is. I am just telling you it would have been worse.
  • Ms. KAPTUR. If that is your best argument, that is not good enough.
  • Mr. PAULSON. I want to explain it to you, because you probably don’t agree there was a crisis.
    .....
  • Ms. KAPTUR. I agree it was a crisis of your making——
  • (p75) - Cliff STEARNS (R-FLA) - And the fact is you are coming here and say you feel the pain of AIG, it’s just outrageous.
  • Mr. PAULSON. Well, I would like to respond to you, Congressman, because I find your statement outrageous.

2009 0716 - GOV (House) - Bank of America and Merrill Lynch: How Did a Private Deal Turn Into a Federal Bailout? Part III, Edolphus Towns (D-NY) - [PDF-212p,  CSPAN-VIDEO]

  • 2008 0917 - WSJ - Paulson’s Statement on Fed’s Actions Surrounding AIG - [link]
    • These are challenging times for our financial markets.
    • We are working closely with the Federal Reserve, the SEC and other regulators to enhance the stability and orderliness of our financial markets and minimize the disruption to our economy.
    • I support the steps taken by the Federal Reserve tonight to assist AIG in continuing to meet its obligations, mitigate broader disruptions and at the same time protect the taxpayers.
  • (p140) - Blaine LUETKEMEYER (R-MO). Mr. Paulson, one of the things that we are looking into here with AIG, can you explain to me, AIG and their Financial Products, was that a subsidiary of AIG or was that part of their business model?
  • Mr. PAULSON. I believe it was part of the business model.
  • Mr. LUETKEMEYER. There wasn’t a separate entity that was separately capitalized?
  • Mr. PAULSON. It was clearly at the holding company and it was part of——
  • Mr. LUETKEMEYER. The thing that makes——
  • Mr. PAULSON. It wasn’t part of an insurance business model, but it was sure part of the company’s business strategy.
  • Mr. LUETKEMEYER. Because it makes a big difference. If it is not part of the insurance product company and it is a subsidiary that is separately capitalized, you can let that thing go down and it doesn’t impact the insurance part of it, which I believe it was. Is that not correct?
  • Mr. PAULSON. Well, I would say this to you. This company was so big and intertwined that it was—if there was any way that the people who were working on this could have found a way to just hive off and let one small part of the company go down——

2010 0127 - GOV (House-OGR) - The Federal Bailout AIG, Edolphus Towns (D-NY)  ---  [BonkNote] 

 

  • 2010 0127 - GOV (House) - The Federal Bailout AIG - [PDF-652p
    • (p133) - Statement of Henry M. Paulson, Jr., Former Secretary, U.S. Department of The Treasury
    • There are three reasons we needed to save AIG that stand out in my mind.
      • First, AIG was incredibly large and interconnected.
      • Second, AIG was seriously underregulated.
        • Although many of AIG’s subsidiaries, including its insurance companies, were subject to varying levels of regulation, the parent entity was, for all practical purposes, an unregulated holding company its business had infected otherwise healthy parts.
      • Third, AIG could not be effectively wound down.
        • Unlike failed depository institutions, which can be taken over by the FDIC with little or no harm to depositors, or the GSEs, which were seamlessly placed into conservatorship by Treasury and the Federal Housing Finance Agency, there was and is no resolution authority available to wind down a failing institution like AIG.
        • The only option is bankruptcy, a process that is simply not capable of protecting the millions of Americans whose finances are intertwined with AIG’s.
      • The Government rescue of AIG in the fall of 2008 was directly shaped by these realities.
        • We had to protect the economy and the finances of millions of Americans.
        • We could not have anticipated the magnitude of AIG’s problems and we had no way of letting it fail without disastrous collateral consequences.
      • We had to intervene, and I am thankful we did.

FCIC_Finding_Aid.pdf

  • 2010-04-02 MFR for Secretary Paulson_1.pdf
  • III. Secretary Henry Paulson
    64,512 INDEX_H4_Background Briefing Book for Commissioners_1.doc
    83,968 INDEX_H4_Background Briefing Book for Commissioners_2.doc
    26,859 INDEX_H4_Background Briefing Book for Commissioners_3.doc
    30,731 INDEX_H4_Background Briefing Book for Commissioners_4.doc
  • 2008-09-24 Paulson Testimony Before the House Financial
    Services Committee_1.pdf
    31,387 b. 2009-07-16 Paulson Testimony Before the House Oversight
    Committee_1.pdf
    18,170 c. 2010-04-20 Paulson Testimony Before the House Financial
    Services Committee_1.pdf
  • Key Quotes - Secretary Paulson_1.pdf
  • b) Paulson FCIC Testimony 5.6.10_1.pdf
    119,768 c) Hank Paulson - suggested questions_1.pdf
    109,647 OLD - Hank Paulson - suggested questions_1.pdf
  • 8-9-2010 Letter to Henry M Paulson_1.pdf
  • 2010-09-14 Paulson Response to Hearing Follow-Up_1.pdf
  • 2008-09-23 Paulson Testimony Before the Senate Banking
    Committee_1.pdf
  • Paulson Briefing - Derivatives 2006_1.pdf
    269,242 Paulson Briefing - OCC Background Information and Credit
    Conditions 2006_1.pdf
  • 2010-04-02 MFR for Secretary Paulson_1.doc
    91,648 a. 2010-04-02 MFR for Secretary Paulson_2.doc
    86,528 a. 2010-04-02 MFR for Secretary Paulson_3.doc
  • 2010 - Book - On the Brink: Inside the Race to Stop the Collapse of the Global Financial System, by Henry M. Paulson 
    • By late October, AIG was in dreadful shape, partly because of deteriorating conditions in the insurance business and partly because of its leveraged capital structure.
    • I explained that AIG differed from Lehman, because Lehman had issues with both capital and liquidity, whereas AIG just had a liquidity problem.
      • The investment bank had been loaded with toxic assets worth far less than the value at which they were carried, creating a capital hole.
    • Nervous counterparties had fled, draining liquidity.
    • In AIG's case the problem wasn't capital—at least we didn't think so at the time.
      • The insurer held many toxic mortgages, but its most pressing problem was a derivatives portfolio that included a large amount of credit default swaps on residential mortgage CDOs.
      • The decline in housing values, and now the cuts in AIG's ratings, required it to post more collateral.