The financial overhaul law passed in July should provide greater long-term growth for the economy, former U.S. Treasury Secretary Henry Paulson said.
“We’re going to have greater and more consistent long-term growth if we have financial big banks that are better regulated,” he said today in Boston at a conference hosted by San Francisco-based brokerage Charles Schwab Corp. “Clearly a lot has to do with how the regulations are written, how they are enforced and how they are used,” he said.
Paulson, 64, was Treasury secretary from 2006 to 2009 during the presidency of George W. Bush. He discussed the financial crisis with Liz Ann Sonders, Schwab’s chief investment strategist, before an audience of investment advisers.
Paulson proposed the $700 billion Troubled Asset Relief Program to Congress after the Sept. 15, 2008, collapse of Lehman Brothers Holdings Inc. and it was enacted in October 2008 to inject capital into hundreds of banks, including Goldman Sachs Group Inc., Citigroup Inc. and Bank of America Corp.
The former Cabinet official said the country now has a systemic-risk regulator and authority for winding down failing firms. “No institution should be too big to fail,” he said.
Current Treasury Secretary Timothy F. Geithner told Congress in a report on Oct. 5 that final losses from the U.S. bank rescue will be limited to housing and auto industry assistance. Paulson said today TARP is a “success” that prevented a greater financial collapse and that the money will come back to taxpayers.
Paulson is now an adviser to Coda Automotive, an electric- carmaker based in Santa Monica, California.
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