Henry Paulson

Henry Paulson is viewed as a fruitful American banker and civil servant. As U.S. Secretary of the Treasury under President George W. Bush, Paulson is best known for leading efforts to support the United States economy during the 2008 financial crisis.

He is the writer of five books, including On The Brink: Inside The Race To Stop The Collapse Of The Global Financial System and Dealing with China: An Insider Unmasks the New Economic Superpower.

Early Life and Education

Henry "Hank" M. Paulson Jr. was brought into the world in Palm Beach, Florida, and brought up in Barrington, Illinois. He earned a four year certification in English from Dartmouth College in 1969 and a MBA from Harvard Business School in 1970. Paulson started his career on the White House Domestic Council as a staff assistant before joining Goldman Sachs in 1974, where he would stay for a considerable length of time and earn the jobs of chairman and CEO.

Treasury Secretary

Assigned by President George W. Bush on June 19, 2006, and confirmed by the Senate on June 28, 2006, Henry Paulson was sworn into office on July 10, 2006, as the 74th U.S. Secretary of the Treasury. In his job, Paulson went about as the President's leading policy advisor on a broad scope of domestic and international economic issues, most remarkably the 2008 financial crisis.

Developing Crisis

On Wednesday, Feb. 7, 2007, just seven months into Henry Paulson's tenure, HSBC Bank USA announced losses linked to U.S. subprime mortgages. This event flagged the beginning of what turned into the 2008 financial crisis, viewed as the most awful economic disaster since the Great Depression of 1929. As months passed, and defaults developed, Paulson would adopt a pensive strategy, crediting the difficulty to a correction inside the housing market. From hedge funds at Bear Sterns to insurance monsters like AIG, all players in the financial industry held a piece of the approaching losses. Henry Paulson, along with Federal Reserve Chair, Ben Bernanke, would make a series of bailouts and salvage packages to treat the developing crisis.

Too Big to Fail

In their book, Firefighting: The Financial Crisis and its Lessons, Paulson, Bernanke, and Timothy Geithner, New York's Federal Reserve chair in 2008, expressed, "Amazing financial hellfires don't occur frequently. For the most part, disturbance in financial markets wears itself out. Markets adjust, firms fail, and life goes on. At times, financial flames get so serious that policymakers need to take care of put them."

In March 2008, Paulson directed the merger of Bear Stearns with JPMorgan Chase, a deal delivered with $29 billion of government financing for Bear Stearns' troubled assets. In this major play by the U.S. Treasury to curb the financial crisis, public analysis of Henry Paulson and Ben Bernanke developed. The Republican conservative was averse to any altering the free market, and the Democratic left was shocked by the government salvage of Wall Street's overpaid elite.

In any case, when Lehman Brothers, a major underwriter of subprime mortgage-backed securities, opted for non-payment on Sept. 15, 2008, without government intervention, markets answered. Lehman's collapse impacted global financial markets for quite a long time.

Before the finish of 2008, Henry Paulson would manage the nationalization of mortgage monsters Fannie Mae and Freddie Mac, support Bank of America as it absorbed Merrill Lynch, give a $85 billion government salvage package to insurer AIG, institute government guarantees for more than $3 trillion worth of money market funds, and gain congressional endorsement of a $700 billion stockpile of government support for the whole financial system.

TARP

The U.S. Treasury, under Paulson, laid out several programs under the Troubled Assets Relief Program (TARP). The program started in 2008 and ended in 2010. During its active two years, TARP forestalled the collapse of the American car industry, restart the secondary credit markets to keep credit flowing to families and businesses, and balance out the U.S. banking system following the 2008 financial crisis.

The Paulson Institute

Henry Paulson, as U.S. Treasury Secretary, further developed U.S. economic relations with China during his tenure. He additionally attempted to modernize the system for giving U.S. Treasury bonds (T-Bonds), assisted upgrade the national security with evaluating cycle to prod foreign investment in the United States, and sent off a program to fight the funding of fear based oppressor gatherings. Paulson likewise attempted to further develop the United States' trading relationships with Panama, Colombia, South Korea, and Peru.

Toward the finish of his tenure with the Treasury Department, Paulson established The Paulson Institute at the University of Chicago in 2011. Zeroed in on sustainable economic growth and saving the natural environment in the United States and China, the Paulson Institute is a think tank and learning center.

The Bottom Line

As U.S. Treasury Secretary from 2006 to 2009, Henry Paulson managed and executed steps to advance the economic situation in the United States and globally during the 2008 financial crisis.

Features

Paulson was instrumental in executing the [Troubled Assets Relief Program](/troubled-resource relief-program-tarp) (TARP).
Henry Paulson filled in as U.S. Treasury Secretary during the 2008 financial crisis.
He co-created Firefighting: The Financial Crisis and its Lessons with Ben Bernanke and Timothy Geithner.

FAQ

What Is Henry Paulson's View of Regulations in Banking Industry?

Henry Paulson has frequently proposed an increase in regulations to prevent further financial emergencies. He has suggested that "a regulator can step in and has the power to liquidate an institution, to liquidate and let it fail in a way so it doesn't hurt the American public."

What Is "Straight Talk With Henry Paulson"?

Straight Talk with Henry Paulson is a series of digital recordings initiated as part of the Paulson Institute. Henry Paulson talks with leaders and teachers around the globe in his series.

How Did Henry Paulson Effect Policies With China During His Tenure As Treasury Secretary?

As Treasury Secretary, Paulson made the Strategic Economic Dialog with China, a system for dealing with a bilateral economic relationship on a long-term strategic basis.