Henry Paulson Quotes

A Fed loan to Lehman Brothers would not have prevented a bankruptcy.

The assumption that Washington could and would resolve Lehman Brothers without a bankruptcy, as it had Bear Stearns, was the single biggest mistake in the series of mistakes in 2007 and 2008 that led to the financial panic and the ensuing epidemic of job losses.

In truth, it's not the shareholders of the American International Group who benefited most from its bailout; they were mostly wiped out. The great beneficiaries have been the creditors and counterparties at the other end of A.I.G.'s derivatives deals - firms like Goldman Sachs, Merrill Lynch, Deutsche Bank, Societe Generale, Barclays and UBS.

No one suggested Lehman deserved to be saved. But the argument has been made that the crisis might have been less severe if it had been saved, because Lehman's failure created remarkable uncertainty in the market as investors became confused about the role of the government and whether it was picking winners and losers.

A.I.G. was even larger than Lehman, with a substantial presence in derivatives and debt markets, as well as in insurance markets.

That decision will in history be written as the biggest mistake that American administration ever made, because Lehmans was a world investment bank. They had testicles everywhere.

Most Ohioans would be surprised to know that the same Wall Street megabanks which received bailouts from taxpayers in 2009 also receive taxpayer-funded advantages today simply because of their 'too big to fail' status.

Prior to the 2008 recession, many financial institutions were engaging in 'proprietary lending,' where a bank would invest funds for its own gain instead of earning revenue through commission by trading on behalf of clients.

When the banks grow to or when these financial institutions grow to such a size that they can't sustain themselves, or what have you, they have problems, economic problems, or financial problems, they shouldn't be able to look back to you and I, the taxpayer, to be bailed out.

Why is it possible to rescue S&L buccaneers in the early '90s and provide guidance to levered Wall Street investment bankers during the 1998 long-term capital management crisis, yet throw 2 million homeowners to the wolves in 2007?

The failure of Lehman Brothers demonstrated that liquidity provision by the Federal Reserve would not be sufficient to stop the crisis; substantial fiscal resources were necessary.

The failure of Lehman may have allowed the government to do more to prop up the economy than it otherwise could.

The blowback against a bailout of Lehman would have been fierce. It is often forgotten, but the prevailing wisdom the day after Lehman fell was that its collapse was a good thing.

Most people understand that Lehman Brothers didn't collapse because Gordon Brown built too many schools and hospitals.

Bank failures are caused by depositors who don't deposit enough money to cover losses due to mismanagement.

What the American people don't understand is how Merrill Lynch or AIG or Lehman Brothers can reward people, and the entity fails. Not only do the shareholders lose, but the entities lose.

The subprime disaster was a result of financial bombs - derivatives - exploding in financial institutions such as AIG and Lehman Brothers, as well as banks and financial institutions throughout the world.

I do not understand how it is that financial institutions could think that they could take taxpayer money and then turn around and act like it's business as usual. I don't understand how they can't see that the world has changed in a fundamental way, that it is not business as usual when you take taxpayer dollars.

The Commission concludes that, as massive losses spread throughout the financial system …, many institutions failed, or would have failed but for government bailouts. As panic gripped the market, credit markets seized up, trading ground to a halt, and the stock market plunged. Lack of transparency contributed greatly to the crisis: the exposures of financial institutions to risky mortgage assets and other potential losses were unknown to market participants, and indeed many firms did not know their own exposures.

If the bankers knew so much about capital markets, how come they got into so much trouble.

I think the bailouts in 2008 were wrong.

I think, with Hank Paulson, the concept of a bailout was anathema to him from day one. He was a Republican; he's a free marketeer. He believes in capitalism, and part of capitalism is believing in failure. And so the idea of bailing out an institution, I think, went against every part of him.

The idea that the largest banks in the world would simultaneously fail, need government support, government guarantees, and/or government intervention to survive was not in my range of realistic scenarios.

As American citizens, if you believe all banks were bailed out, you would hate banks. I would, too.

It's better to have the taxpayer pay for the losses than have the United States of America become an economic wasteland. If the financial system collapses, it's really, really hard to put it back together again.