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13 March 2008

Paulson calls financial institutions to raise capital




“Credit markets are not functioning as normal”, treasury secretary Paulson said and issued a call for US financial institutions to raise capital quickly so they can keep lending. “We are encouraging financial institutions to continue to strengthen balance sheets by raising capital and revisiting dividend policies”, Paulson said. “We need these institutions to continue to lend and facilitate economic growth”, he added.

 

Paulson outlined the recommendations from Presidential Working Group that he heads. “Today's recommendations are part of a much larger effort that spans multiple fronts”, he said and announced a financial regulatory review that will be released as a regulatory blueprint in the weeks ahead. “We also have private sector committees developing best practices for investors and hedge fund managers and anticipate publishing guidelines for public comment next month.”

 

Commenting on the PWG recommendations he said that regulators and all market participants must be more aware of and better able to respond to risks. “Credit rating agency practices must improve, and the users of their services must rely less on, and appreciate more the limitations of, ratings products”, he outlined.

 

Statement Paulson



© US Treasury


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