Henry Paulson Quotes

Economic freedom is a highly desirable state -- but in bust and boom we must be prepared to face the its consequences.

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.

A lot of our respected financial institutions are just casinos in drag.

In engineering, people have a big margin of safety. But in the financial world, people don't give a damn about safety. They let it balloon and balloon and balloon. It's aided by false accounting.

The economics profession advances by one confusing financial disaster at a time.

The Federal Reserve has a responsibility to ensure the safety and soundness of financial institutions and to contain systemic risks in financial markets.

The reality is that the institutional framework in which Wall Street operates is fundamentally inappropriate, and it inevitably generates violent fluctuations of the market.

I'm of those who believe that excesses in all matters are not a good idea, whether it's formation of bubbles, whether it's excess in the financial market, whether it's excess of inequality, it has to be watched, it has to be measured, and it has to be anticipated in terms of consequences.

Financial crises are an unfortunate but necessary consequence of modern capitalism.

In the financial system we have today, with less risk concentrated in banks, the probability of systemic financial crises may be lower than in traditional bank-centered financial systems.

Banks are employing risky derivatives strategies to goose up returns….the interbank market could freeze up, and one could well have a full blown financial crisis.

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.

At some point, there will be some other financial crisis. It's in the nature of a capitalist system.

You cannot have the financial system crippled because of lack of decision making and lack of quality people.

The entire economy relies on the suspension of disbelief. So does a fairy story or an animated cartoon. This means that no matter how soberly the financial experts dress, no matter how dry their language, the economy they worship can only ever be as plausible as an episode of 'SpongeBob SquarePants.'

In the wake of the 2008 recession, Congress and the Obama Administration rightly focused financial regulation on protecting the nation's financial system from itself.

The world of derivatives is full of holes that very few people are really aware of. It's like hydrogen and oxygen sitting on the corner waiting for a little flame.

I think it's been, you know, kind of like a tragic play to this point. But at this point, I think it's clear, and will be clear to the majority of the Congress. I think it's clear to the American people that there is only one countervailing force to a world where financial institutions are trying to sell instruments every day and where credit has dried up, and that's the United States Treasury.

With government deregulation and the triumph of financial liberalization, the dangers of systemic risks, the possibility of a financial tsunami, sharply increased.

The Mexican debt crisis, Latin American debt crisis, the crises of the 1990s, the Wall Street stock market crash, and other events should have reminded us, and did remind us, that financial instability remains a concern, remains a problem.

The actions taken by central banks and other authorities to stabilize a panic in the short run can work against stability in the long run if investors and firms infer from those actions that they will never bear the full consequences of excessive risk-taking.

Investors need to get rewarded for their investment, especially in unstable countries.

Do we have to regulate derivatives? Yes, we do. 'Cause when I did this in my investments, frankly, no one knew who could pay who. But derivatives have an important place in our economy.

For market discipline to constrain risk effectively, financial institutions must be allowed to fail. Under optimal financial regulatory and financial system infrastructures, such a failure would not threaten the overall system.

The banking collapse was caused, more than anything, by bad government policy and the total failure of bad regulation, rather than by greed.