US Treasury Secretary Henry Paulson said Monday that he has never considered to use taxpayer money to bail out Lehman Brothers, which was choked by the credit crisis and falling real estate values.
While briefing reporters at the White House, Paulson said he "never once" considered that it was appropriate to put taxpayer money on the line in resolving Lehman Brothers, the fourth-biggest investment bank in the United States.
The 158-year-old investment bank filed for Chapter 11 bankruptcy protection from its creditors Monday and said it was trying to sell off key business units.
To discuss the future of Lehman Brothers, an emergency meeting attended by top Washington policymakers and major financial institutions, was held Friday at the New York Federal Reserve Bank and lasted three days.
At the meeting Paulson held firm to the position that the federal government would not step in and supply any money to resolve the crisis at Lehman Brothers.
Paulson stressed at the briefing that he did not "take lightly" any decision to put taxpayer money at risk to prop up a private company.
As the government refused to provide a financial backstop to potential buyers, Lehman Brothers's last hope of surviving outside of court protection faded Sunday after British bank Barclays PLC withdrew its bid to buy the investment bank.
In the fallout, Merrill Lynch was forced to agree to be sold to Bank of America, and insurance giant AIG sought to raise cash to head off its own crisis.
There are possibilities that more financial institutions could follow these titans' suit, analysts believe, describing the situation as "a financial hurricane".
Still, the American people can remain confident in the "soundness and resilience in the American financial system," Paulson said at the briefing.
Late Sunday, the treasury secretary vowed to take steps to maintain stability in financial markets.
"I am committed to working with regulators and policymakers – including Congress – to take necessary and appropriate steps to maintain the stability and orderliness of our financial markets," Paulson said in a statement issued Sunday night.
"And I will engage with regulators and policymakers around the world to that end," he said.
(Xinhua News Agency September 17, 2008)
