The US Treasury secretary on Sunday defended the Fed’s decision to rescue Bear Stearns and said the government would take whatever action was necessary to ensure the stability of the financial system. Hank Paulson said he was convinced the Fed’s move to provide emergency funding to Bear Stearns last week was the “right decision” even though he recognised the risk of moral hazard. “You need to balance these two considerations,” he told Fox News. Paulson declined to say whether the government would be prepared to rescue other troubled investment banks, saying only that the government was “prepared to do what it takes to maintain” financial system stability.

This entry was posted by Gwen Robinson on Monday, March 17th, 2008 at 5:48 and is filed under Capital markets, People. Tagged with bear stearns, hank paulson. Edit this entry.