Looking back as he prepares to end his term as Treasury secretary in three weeks, Henry Paulson Jr. said that he feared that the world financial system faced a meltdown on three occasions in the past six months.
The first such instance was in August, when he realized that mortgage giants Fannie Mae of Washington and Freddie Mac of McLean, Va. were in serious trouble, he said in an interview with Financial Times.
The second occasion took place in mid-September, when Lehman Brothers Holdings Inc. of New York collapsed and several other financial institutions teetered on the brink of failure.
The third instance took place on Sept. 29, when the House of Representatives voted to reject his request for a $700 billion bailout to shore up the financial system.
Eventually, Congress authorized the Troubled Asset Relief Program in early October and Mr. Paulson was able to deploy public capital both in rescue operations and to support the wider financial system.
He characterized his approach to the crisis as “aggressive intervention. We did things that under normal circumstances would have been, and are today, objectionable but are better than the alternative,” Mr. Paulson told FT.
“We've done all this without all of the authorities that a major nation like the U.S. needs,” he said.
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