page_title: Henry Paulson
section_title: U.S. government economic bailout of 2008
hierarchical_section_title: Henry Paulson / Credit Crisis of 2007–2009 / U.S. government economic bailout of 2008
caption_attribution_description: English: President George W. Bush stands with Federal Reserve Chairman Ben Bernanke, left, SEC Chairman Chris Cox, right, and Treasury Secretary Hank Paulson as he delivers a statement on the economy Friday, Sept. 19, 2008, in the Rose Garden of the White House. Русский: Президент США Джордж Буш младший вместе с Председателем Федеральной резервной системы Беном Бернанке (слева), Председателем Комиссии по торговле ценными бумагами Крисом Коксом (справа) и Секретарём Казначейства США Хэнком Поулсоном. Президент США произносит речь в Розовом саду Белого дома по проблеме сложившейся негативной экономической обстановки в стране.
context_page_description: Henry Merritt "Hank" Paulson Jr. is an American banker who served as the 74th United States Secretary of the Treasury from 2006 to 2009. Prior to his role in the Department of the Treasury, Paulson was the chairman and chief executive officer of Goldman Sachs.
  He served as Treasury Secretary under President George W. Bush. Paulson served through the end of the Bush administration, leaving office on January 20, 2009. He is now the chairman of the Paulson Institute, which he founded in 2011 to promote sustainable economic growth and a cleaner environment around the world, with an initial focus on the United States and China.
context_section_description: Paulson, acting as U.S. Treasury Secretary, caused outcries from both the Republican and Democratic Parties as well as the general populace as he tried to get the situation under control.
  Through unprecedented intervention by the U.S. Treasury, Paulson led government efforts which he said were aimed at avoiding a severe economic slowdown. After the Dow Jones dropped 30% and turmoil ensued in the global markets, Paulson pushed through legislation authorizing the Treasury to use $700 billion to stabilize the financial system. Working with Federal Reserve Chairman Ben Bernanke, he influenced the decision to create a credit facility (bridge loan and warrants) of US$85 billion to American International Group so it would avoid filing bankruptcy, after having been told that AIG held teacher pension plans, 401k plans, $1.5 trillion in life insurance plans for Americans, and the French Finance Minister called to let Paulson know that AIG held the interests of many Eurozone countries.
  On September 19, 2008, Paulson called for the U.S. government to use hundreds of billions of Treasury dollars to help financial firms clean up nonperforming mortgages threatening the liquidity of those firms. Because of his leadership and public appearances on this issue, the press labeled these measures the "Paulson financial rescue plan" or simply the Paulson Plan.
  With the passage of H.R. 1424, Paulson became the manager of the United States Emergency Economic Stabilization fund.
  As Treasury Secretary, he also sat on the newly established Financial Stability Oversight Board that oversaw the Troubled Assets Relief Program.
  Paulson agreed with Bernanke that the only way to unlock the frozen capital markets was to provide direct injections into financial institutions so investors would have confidence in these institutions. The government would take a non-voting share position, with 5% dividends for the first year on the money lent to the banks and 9% thereafter until the banks stabilized and could repay the government loans. According to the book Too Big To Fail, Paulson, Bernanke, New York Federal Reserve Chairman Timothy Geithner, and FDIC Chairman Sheila Bair attended the meeting on October 13, 2008, at which this plan was presented to the CEOs of nine major banks.
caption: Paulson, Ben Bernanke and Christopher Cox in September 2008 as President Bush speaks about the economy
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