Paulson Wants Closer Tabs on Investment Banks

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.