Treasury Secretary Henry M. Paulson Jr. said Wall Street investment firms should provide more information on their financial condition if they are allowed to borrow money from the Federal Reserve.
The Federal Reserve acted promptly to resolve the Bear Stearns situation and avoid a disorderly wind-down, Paulson said Wednesday. It is the job of regulators to come together to address times such as this, and we did so. At this time, the Federal Reserves recent action should be viewed as a precedent only for unusual periods of turmoil.
Paulson said investment firms should be subject to the same type of regulation and supervision as commercial banks if theyre looking for regular access to the discount window, but said that regular access will be unlikely.
Despite the fundamental changes in our financial system, it would be premature to jump to the conclusion that all broker-dealers or other potentially important financial firms in our system today should have permanent access to the Feds liquidity facility, he said.
