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French Counterpart Calls Paulson Out on Lehman

Lagarde blames treasury sec's decision for increased global turmoil

By Jason Farago, Newser Staff

Posted Oct 8, 2008 8:34 AM CDT

(Newser) – Henry Paulson's decision to let Lehman Brothers collapse was "horrendous," his French counterpart said today. Christine Lagarde told a radio interviewer that "for the equilibrium of the world financial system, this was a genuine error." Lagarde added that her government would support financial institutions threatened with bankruptcy and that the EU had to band together to prevent "another Lehman."

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Christine Lagarde arrives at the Elysee Palace for a meeting of the country's top bankers and insurers with French President Nicolas Sarkozy in Paris, Monday, Oct. 6, 2008. (AP Photo/Thibault Camus)

U.S. Treasury Secretary Henry Paulson, right, and French Finance Minister Christine Lagarde at the G8 Finance Ministers' Meeting in Osaka, Japan, Saturday, June 14, 2008. (AP Photo/Itsuo Inouye)

U.S. Treasury Secretary Henry Paulson, right, and French Finance Minister Christine Lagarde at a bilateral talk in Tokyo Saturday, Feb. 9, 2008. (AP Photo/Koji Sasahara)

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When we let one go, the risk is that others at that moment don't know who their counterparty is anymore and find themselves exposed. Once we let one domino fall, the rest risk collapsing. - Christine Lagarde, French finance minister

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French Counterpart Calls Paulson Out on Lehman