Monday, February 1st, 2010
Hank Paulson feared there would be a run on the dollar during the early phase of the financial crisis when global concerns were focused on the US, the former Treasury secretary has told the Financial Times.
“It was a real concern,” Mr Paulson said in an interview ahead of the release on Monday of his memoir On the Brink. A dollar collapse “would have been catastrophic,” he said. “Everything that could go bad did not go bad. We never had the big dislocation of the dollar.”
When the crisis escalated and went global with the failure of Lehman Brothers in September 2008, the dollar rallied – but Mr Paulson had to grapple with a firestorm of financial failures.
He feared Goldman Sachs and Morgan Stanley would go down along with Washington Mutual and Wachovia.