Paulson memo warned banks to take aid or be exposed!
WASHINGTON - May 14, 2009 - Former Treasury Secretary Henry Paulson, describing nine U.S. banks as “central to any solution” of the credit crisis, told their leaders to take government aid or be forced to by regulators, according to a memo his staff prepared for a private meeting in October.
“If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance,” Paulson’s one-page list of talking points for the session with the banks’ chief executive officers said.
“We don’t believe it is tenable to opt out because doing so would leave you vulnerable and exposed,” the memo said.
Investing $125 billion in the financial institutions was a shift for the Bush regime, which had proposed buying troubled assets with $700 billion Congress approved 10 days earlier. The memo is among newly released Treasury Department documents containing details about the Oct. 13 meeting.
“Most Americans are going to be uncomfortable with the government forcing the banks into this arrangement,” said Tom Fitton, president of Judicial Watch, a nonprofit research group in Washington that obtained the documents under a Freedom of Information Act request.
Andrew Williams, a spokesman for the Treasury, didn’t return calls seeking comment.
Banks worldwide have taken $1.45 trillion in writedowns and losses during the worst credit crisis since the Great Depression.
