Hank Paulson: ‘We can never abolish financial crises. They will always happen.’

Financial Times/Interview of Hank Paulson/4-15-2023

“It’s been a real wake-up call. Con­fid­ence has been shaken. The risks are still out there. There was a the­ory that in the midst of a sys­temic crisis, the gov­ern­ment could wind down a fail­ing insti­tu­tion and stop a panic without dam­aging the eco­nomy. That should have been dis­proved by Covid. In early March, the fail­ure of two banks, which had just over 1 percent of US bank­ing assets, threatened to des­troy the regional bank­ing sys­tem, and the Biden admin­is­tra­tion came with a very quick response to stop that. There shouldn’t be a myth that ‘too big to fail’ has been solved, because it hasn’t.” – Hank Paulson, former Treasury Secretary

USAGOLD note:  The quote above is Paulson’s response to the question – Are you “happy with the fact that the US gov­ern­ment is now essen­tially guar­an­tee­ing every deposit in the land. Isn’t that get­ting close to hav­ing a social­ist bank­ing sys­tem?” He goes on to say that “We can never abol­ish fin­an­cial crises. They will always hap­pen.”