Paulson Wants Closer Tabs on Investment Banks

More transparency needed if they're to borrow from Fed, Treasury chief says

By Sam Gale Rosen, Newser Staff

Posted Mar 26, 2008 2:25 PM CDT

(Newser) – Treasury Secretary Henry Paulson said today that investment banks owe the government more information about their financial condition if they are occasionally allowed to borrow money from the Federal Reserve, the New York Times reports. Paulson seemed to call for tighter regulations before calling the recent bailout of Bear Stearns "precedent only for unusual periods of turmoil."

Paulson wasn't specific in addressing regulatory differences in the treatment of commercial banks—which are able to borrow from the Fed under the "discount window—and investment firms, only recently given that option. He also alluded to greater cooperation among federal agencies in keeping tabs on investment banks' transactions—and in keeping those transactions transparent.

Treasury Secretary Henry Paulson pauses while making remarks at the second annual Capital Markets Summit, Wednesday, March 26, 2008, in Washington. (AP Photo/Lawrence Jackson)

Treasury Secretary Henry Paulson makes remarks at the second annual Capital Markets Summit, Wednesday, March 26, 2008, in Washington, where he called for more transparency from investment banks. (AP Photo/Lawrence Jackson)

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

More Newser Stories

Bailout Won't Bail Out Bernanke

Nation needs explanation of how it will help

(NEWSER) - The economic bailout plan does nothing to address the "collapse in confidence" hammering the financial system, Christopher Carroll writes for the Financial Times. Using the example of the "Bank of Rome" in August, 79 AD, the Johns Hopkins economist argues that the plan makes as much sense as expecting that the "citizens of Pompeii will repay their mortgage loans" and calls on Ben Bernanke to step up. More»

Better Than a Bailout: Boost FDIC Coverage to $1M

Higher deposit insurance would bring money in, help thaw credit markets

(NEWSER) - Congress should stop fighting over the Paulson bailout, writes BusinessWeek economist Michael Mandel, and approve an expansion of FDIC deposit insurance to $1 million. It should also triple deposit insurance reserves to $145 billion. It would solve the immediate problem, calming the hysteria in the market, and attract funds to banks, he argues, and give Congress time to decide whether banks, and the housing market, still need federal support. More»

Fed, Treasury Fall Back on Existing 'Inadequate' Tools

With no federal deal, agencies limited to ad hoc solutions

(NEWSER) - With yesterday’s failure of the $700 billion bailout, the Fed and Treasury are reconsidering their options, the New York Times reports. Fearful of cutting interest rates, they're back to rescuing struggling institutions on a case by case basis, and printing money—offering $150 billion in emergency loans to banks and $330 billion to foreign central banks yesterday. More»

Execs Were Paid $3B to Lay Credit Crisis Foundation

Wall Street chieftains were well rewarded for risks they took in 2003-07

(NEWSER) - More than $3 billion was paid to the chief executives of the five biggest financial firms on Wall Street in the run-up to the credit crisis, Bloomberg reports. While supervising bad mortgage-related credit bets that eventually brought the financial system to its knees, Merrill Lynch’s Stanley O’Neal took in $172 million in 2003-07, while Bear Stearns’ James Cayne took in $161 million. More»

We Don't Really Need a Bailout

With investment banks dead, the point of this is ... what, exactly?

(NEWSER) - Now that all the big investment firms are no more, why exactly do we need a bailout? Paulson’s plan involves buying assets that are illiquid, but not worthless. “But regular banks hold assets like that all the time,” writes James Galbraith in the Washington Post. “They’re called ‘loans.’” Runs on non-investment banks only occur when investors panic. Eliminate the arbitrary $100,000 cap on FDIC insurance, and there will be no reason to panic. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Paulson Wants Closer Tabs on Investment Banks

More transparency needed if they're to borrow from Fed, Treasury chief says

OTHER STORIES ON OUR RADAR

Federal Reserve • Henry Paulson • Bear Stearns • Treasury Department • investment banks • commercial banks • discount window • financial crisis

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Bailout Won't Bail Out Bernanke

Nation needs explanation of how it will help

Better Than a Bailout: Boost FDIC Coverage to $1M

Higher deposit insurance would bring money in, help thaw credit markets

Fed, Treasury Fall Back on Existing 'Inadequate' Tools

With no federal deal, agencies limited to ad hoc solutions

Execs Were Paid $3B to Lay Credit Crisis Foundation

Wall Street chieftains were well rewarded for risks they took in 2003-07

We Don't Really Need a Bailout

With investment banks dead, the point of this is ... what, exactly?

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?

Paulson Wants Closer Tabs on Investment Banks

More transparency needed if they're to borrow from Fed, Treasury chief says

Bookmark & Share

OTHER STORIES ON OUR RADAR

Federal Reserve • Henry Paulson • Bear Stearns • Treasury Department • investment banks • commercial banks • discount window • financial crisis

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Bailout Won't Bail Out Bernanke

Nation needs explanation of how it will help

Better Than a Bailout: Boost FDIC Coverage to $1M

Higher deposit insurance would bring money in, help thaw credit markets

Fed, Treasury Fall Back on Existing 'Inadequate' Tools

With no federal deal, agencies limited to ad hoc solutions

Execs Were Paid $3B to Lay Credit Crisis Foundation

Wall Street chieftains were well rewarded for risks they took in 2003-07

We Don't Really Need a Bailout

With investment banks dead, the point of this is ... what, exactly?

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?