Henry Paulson Quotes

It is probably the case that some regulation of financing will make crises less likely, and I would say higher capital requirements are an almost fail-safe way to make banks safer. But there are a lot of other things that may not be doing that, and so we need to be careful about sort of, like, rushing to one conclusion or another.

Fannie Mae may have conformed to the rules but the rules didn’t conform to reality. A major bank or financial institution could meet every single regulatory requirement yet still be at the risk of collapse.

To be sure, booms and busts will come and go. But their severity can vary dramatically based on the policies in place to prevent them. With stronger regulations, neither the housing and derivatives bubbles nor the eventual crash would have been so bad.

It is not my belief that we need greater government regulation of hedge funds with respect to the systemic risk they create.

You can't look back at the worst financial crisis of our lifetimes that started in 2008 and not have some important lessons about the critical nature of oversights in financial markets and institutions.

We must learn the lessons of the 2008 crash: no company should be able to become too big to fail.

A lot has been done to improve safety and soundness and confidence in financial markets and financial institutions, a lot of which was necessary.

I believe strongly that we need a finance industry that is good for the economy, and I don't think anybody would argue that during the eight years leading up to the Great Recession, a lot of bets were made [and] risks taken that weren't good for the economy.

The Obama administration's plan is to have the Federal Reserve regulate banks that might pose a 'systemic risk' if they were to fail.

As we try to make the financial system safer, we must inevitably confront the problem of moral hazard.

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.

I don't want to drive the markets crazy. I don't want to create trouble, but rather order and rules and norms. We have to struggle against financial excesses, those who speculate with sovereign debt, those who develop financial products which have done so much harm.

This crisis exposed very significant problems in the financial systems of the United States and some other major economies. Innovation got too far out in front of the knowledge of risk.

The only reason investors haven't run screaming from an obviously corrupt financial marketplace is because the government has gone to such extraordinary lengths to sell the narrative that the problems of 2008 have been fixed.

Securitization was one of the most brilliant financial innovations of the 20th century. It freed up a lot of capital. If it had been done responsibly, it would have been a wondrous thing because nothing is more stable, there’s nothing safer, than the American mortgage market.... It worked for years. But then people realized they could scam it.

No private enterprises should be allowed to think of itself as too big to fail. No taxpayer bailouts should allow executives or stockholders to relax.

We are optimistic with respect to thrifts .... I don't think that there is any cause for undue concern and I would reject any suggestion that we are in the midst of some sort of a major systemic problem with respect to any element of our financial services industry.

I think people have to be very careful with new ideas [in fiancé and economics]. What you need to worry about is when you have something that’s a really good idea, but you get too much of it too fast, like over-the-counter derivatives.

Compelling large banks to hold more capital reduces their risk of failure, but as the last financial crisis [the Meltdown of 2008] demonstrated, during a wide-spread panic, investors and lenders lose all faith in the values banks have assigned to their assets, and many mistrust the banks that claim to have enough capital.

Don't act like a bank unless you are a bank. That was a really big lesson learned from 2008.

What we have to find is the right level of regulation of our financial system so that it has the incentive to invest in things, but at the same time, it is sufficiently regulated so it can't get in the kind of trouble that we have seen in the past and we have seen recently.

I don't want to create a too-big-to-fail player.

Bringing back something akin to Glass-Steagall would clearly help limit risk in the system. And that's a very good and worthy goal. Letting banks sell securities and insurance products and services allowed them to grow too big too fast and fueled a culture that put profit and pay over prudence.

The major reform legislation, Dodd-Frank, was named after two guys bought and sold by special interests, and one of them should be shouldering a good amount of blame for the crisis.

The financial crisis was linked to the fact that banks had excessive leverage and too many risky assets. The solution is not to try to dictate to banks what they can do or not do, but to require them to strengthen their capital to absorb potential losses and hold less risky assets.