NEW YORK (TheStreet) -- Former Treasury Secretary Henry Paulson has few regrets over actions taken by the U.S. government five years ago to forestall the credit crisis.
Speaking at the Economic Club of New York on Monday, Paulson said he was "convinced" that the U.S. government took appropriate actions during the crisis and that his decisions and those of other government officials would "stand the test of time."
Paulson had a very busy September 2008, as the Treasury, through the Federal Housing Finance Agency, took Fannie Mae (FNMA) and Freddie Mac (FMCC) under government conservatorship, where the two dominant U.S. mortgage finance companies remain. Another major event that month was the bankruptcy of Lehman Brothers, following Paulson's decision not to support any government backstop that might have facilitated a sale of the distressed investment bank.
Following congressional approval of the $700 Troubled Assets Relief Program, or TARP, Paulson in October 2008 met with executives of the nine largest U.S. bank holding companies to discuss the government's plan to take large capital positions in the big banks. Paulson "persuaded" some of the bank executives to accept TARP money, even though the executives didn't think their banks needed help. Banks receiving the first round of TARP investments included Bank of America (BAC), JPMorgan Chase (JPM), Citigroup (C), Wells Fargo (WFC), Morgan Stanley (MS) and Goldman Sachs (GS).Paulson was CEO of Goldman Sachs before becoming Treasury Secretary in June 2006. Paulson on Monday repeated his previous statement that he "didn't want to be the Treasury Secretary presiding over another Great Depression." He also said the bank bailout and related actions "were deeply distasteful to me," although they were "absolutely necessary." He also said he was "embarrassed" to take out the "so-called bazooka," possibly referring to his arm-twisting of some bank executives before they agreed to take TARP money. When asked on Monday if he might wish to "take a Mulligan" for any of the actions he took during the financial crisis, Paulson said "I never was ever able to convince the American people that what I did wasn't for Wall Street." Here's a summary of other comments Paulson made on Monday:
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