Nobody downloaded yet

Paulson Statement on Regulation - Essay Example

Comments (0) Cite this document
Essentially, the remarks of Treasury Secretary Henry M. Paulson before the U.S. Chamber of Commerce dealt with the current, turbulent state of the country's financial and housing markets in the wake of the sub-prime mortgage crisis and the domino effect it has dealt to the economy…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.5% of users find it useful
Paulson Statement on Regulation
Read TextPreview

Extract of sample "Paulson Statement on Regulation"

Download file to see previous pages He reiterated his confidence in the strength and resiliency of the country's capital markets, and that the country would be able to work its way out of the situation.
In his introduction, the Secretary remarked that the most pertinent priority of the government was to limit the actual effects of this crisis on the country's real economy. He advised that the key to keeping the country's economic state above water was to maintain liquid and stable financial markets, and that banks must put in their fair share by making credit readily available both to ordinary citizens and businesses. He added that there must be vigilant efforts introduced in order to dilute the destructive effects of the recent housing downturn on the economy.
In addressing the importance of orderly financial markets, Paulson stated that the recent turmoil the capital markets have been facing were largely in part to the reduced access to short-term funding, which in turn caused widespread liquidity issues even with the biggest investment banks. As a result of these volatile conditions, Bear Sterns, the country's 5th largest investment house, found itself in bankruptcy. He justified the Federal Reserve's intervention leading to the JP Morgan buyout, stating that market stability was the primary concern of the government and the issue warranted prompt resolution.
In light of the Bear Sterns fiasco, the Federal Reserve took a leap of faith by putting forth a temporary program which is meant to provide short-term liquidity to primary dealers. From a historical perspective, such bold moves by the country's central lending institution had not been propagated since the 1930's. While Paulson praised the Federal Reserve for its creativity in dealing with a potentially crippling situation, he chided that such drastic measures also have corresponding repercussions which need to be addressed. He argues that while commercials banks have traditionally had access to the Federal Reserve's liquidity facilities, these have been accompanied by strong regulation and supervision to avoid and potential pitfalls. Hence, the same measures should be enacted this time around if only for the sake of prudence. Paulson suggests that in opening the discount window temporarily to non-insured and non-depository institutions, tighter measures must be enacted in screening these institutions, which will enable them to make better informed lending decisions.
In explaining the current mortgage crisis, he admits that its rapid free-fall has adversely affected both financial institutions and capital markets alike. Far from putting the blame on the inherently flawed sub-prime mortgage system, he argues that unsustainable home price appreciation in certain key areas was the primary driver behind the crisis. Also, once stability is restored to the housing sector, this will lead to a much more favorable situation for institutions involved with mortgage-backed securities.
Paulson admits that with the current housing crisis, the availability of mortgage financing has been almost non-existent, due largely in part to the crippling liquidity problems that have beset lending institutions. He offers that in order for the housing and mortgage industry to get back on its feet, government-backed institutions such as Fanny Mae and Freddie Mac should be willing to ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Paulson Statement on Regulation Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Paulson Statement on Regulation Essay Example | Topics and Well Written Essays - 1000 words. Retrieved from
(Paulson Statement on Regulation Essay Example | Topics and Well Written Essays - 1000 Words)
Paulson Statement on Regulation Essay Example | Topics and Well Written Essays - 1000 Words.
“Paulson Statement on Regulation Essay Example | Topics and Well Written Essays - 1000 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Paulson Statement on Regulation


...?Personal ment on Masters in Economic Regulation and Competition Policy Life offers an individual very few chance to blossom. I believe there are options for a person to decipher if one has the knack to properly analyze them and contemplate the same within the time that is offered to her. My case is no different. I have envisioned success as it has dawned upon me through hard work and commitment at my end. I aspire to have a Masters degree in Economic Regulation and Competition Policy from the City University London so that I could give back to the society what I have learned from it. Being a female who looks at life from an optimistic mindset, I hail from the Sultanate of Oman and am 20 years old. I have...
4 Pages(1000 words)Essay

Government Regulation

...?JianpengSu ENGL 102 03/11/13 Government Regulation The society today has numerous shortfalls and conflicts brought about by criminal elements withinthe society. As such, every government, or established authority needs to take charge of the situation by maintaining peace, law and order. The main way of maintaining peaceful co-existence of members within a given society is by establishing laws, rules and regulations against which law enforcement agencies use to apprehend offenders. Therefore, regulation is the legal framework set up by the government or any other ruling authority within a society that prevents and controls or restricts certain events or activities that may influence the...
7 Pages(1750 words)Essay

Summary about Hank by Henry Paulson

... “Hank: Five Years from the Brink” by Henry Paulson Introduction In September 2008, Henry Paulson popularly known as Hank among many US citizens had the task to save US economy, which was at the verge of collapsing. In the video “Hank: Five Years from the Brink” Henry Paulson narrates about events that took place and how he continuously persuaded stakeholders like congress, presidential candidates, and banks to sign off $I trillion worth bailouts (Paulson). The film also centers on him while he was Treasury Secretary in President George W. Bush’s regime, how he settled critical resolution of allowing Lehman Brothers be unsuccessful financially. Besides, he points out how he managed to persuade congress to approve nearly $1trillion... in...
3 Pages(750 words)Essay

Airline regulation

...Regulation of Airline Industry The deregulation of the US airline industry in 1978 has brought about myriad economic benefits for both airline companies and their customers. However, current problems in the industry have raised the question of whether government regulation may be indeed crucial in addressing prevailing conditions. This paper discusses the need as well as the extent by which government should exercise control over the airline industry. Need for Government Regulation To some degree, government regulation may be deemed as vital in keeping the efficiency level within the airline industry. Since the deregulation of the industry, it is reported that many...
2 Pages(500 words)Essay

Financial Regulation

...FINANCIAL REGLATION IN UK Financial Regulation in UK Introduction The regulation of financial markets and its implications have been a topic of considerable interest among researchers and policy makers for a long time. On the one hand, it is argued that the regulation of financial markets has welfare benefits due to the existence of market imperfections (Llewelleyn, 1999). On the other hand, it is argued that financial market regulation imposes significant costs to an economy that outweighs the benefits (Benston, 1998).The debate remains unsettled. In this essay, the failure of financial regulation in UK in the light of the recent financial crisis is...
10 Pages(2500 words)Essay

Internet regulation

...i) Introduction……………………………………………………………....………..2 a. Internet regulation………………………………..………..….3 ii) Already existing solution b. Internet regulation among consumers ………..…………..3 c. Internet regulation in the commercial sector…………..….4 d. Government involvement …………………………..……..5 iii) Proposed solution………………………………………………………5 iv) Solution ……………………………………….…………..………6 Name: Course: Instructor: Date Internet regulation i) Introduction The internet is a global system of interconnected computer networks that utilizes the standard internet protocol suite to link several billion devices globally. It is the form of communication platform that is most popular in all parts of the world...
6 Pages(1500 words)Research Paper

Securities regulation

...Principles-based Regulations versus Rules-based Security Regulations There has been a critical debate as to whether accountants should adopt principle-based regulation or the rules-based regulations, owing to their requirement to prepare their financial statements based on the above regulations. However, accountants may opt for either of them, based on their merits and demerits. For instance, in the rules-based regulations, accountant ought to follow the laid down procedures (detailed rules) in the preparation of the financial documents. Most accountants have been perceived to opt for this security...
1 Pages(250 words)Essay

Financial Regulation

...conduct entailing the financial flow. Regulations or supervisions in regards to the financial accounting are described as the rules that are developed by an independent authority body that has the administrative power to control and monitor how financial statements should be prepared, and the activity of the body in authority will have the impact of restricting and controlling the accounting options that are available to an organization (Prasad & Kawai, 2013). The financial regulation incorporates a basis for enforcing and monitoring compliance with a particular regulatory requirement. (Akseli & Gray, 2011). CONCLUSION The financial industry is considered to be the core of the modern...
2 Pages(500 words)Essay

Bank regulation

...Bank Regulations By Key words: Global financial crisis Bank Regulation Introduction The global financial crisis that was first experienced from 2010 and initially offset by the bursting of the housing bubble in the US led to the discovery of a number of shortcomings relating to the practices and policies that were being employed by financial institutions at the time coupled with the supervisory and regulatory agencies involved (Boeckman 2013). The deficiencies exposed by the crisis showed for instance how the holdings of the financial institutions were inadequate with respect to capital of high quality, shortcomings relating to the supervisor of rudimentary micro-prudential, policies and practices of...
12 Pages(3000 words)Essay


...The effects of regulation and deregulation in the recent financial crisis Introduction Regulation of the financial system actually entails setting up rules and regulations and also establishing an enforcement mechanism that is designed to control the operation of the systems constituent institutions and markets (Macey, 5). The main objectives of regulation are basically to raise state revenue, minimize the risk of financial crisis and to limit or channel financial power to an advantage. After the financial crisis of 2008/2009 in the U.S, consumer organizations, labor unions and political parties advocated the tightening of financial regulation....
5 Pages(1250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Paulson Statement on Regulation for FREE!

Contact Us