''But perhaps the most telling anecdote is from early October 2008, when
Henry M. Paulson Jr., the Treasury secretary, summoned Ms. Bair to his
office. No reason was given for the meeting. When she arrived, Ben S.
Bernanke, the Federal Reserve chairman, was already there. Timothy F. Geithner, then the president of the New York Fed, was on the phone.
Handed a piece of paper, Ms. Bair saw that she had been ambushed. It was
a script, prepared for her by the Treasury and the Fed, stating that
the F.D.I.C. was moving to guarantee all the liabilities in the
financial system. Astonishingly, the guarantee would cover all bank
depositors and even protect unsecured claims against institutions. In
short, the F.D.I.C. was being asked to back “everybody against
everything in the $13 trillion banking system,” Ms. Bair writes.''
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