2008 Financial Crisis Essay

2298 Words May 16th, 2013 10 Pages
Question 1
Hank Paulson played a critical role in the financial crisis of 2008. How did Mr. Paulson help create the environment that led up to the financial crisis? What mistakes did he make as Secretary of Treasury when he had to manage the financial crisis of 2008? Do you think Mr. Paulson acted as an unbiased Secretary of the Treasury or did his background at Goldman impact his thinking and his actions?

As Secretary of Treasury, Hank Paulson’s lax supervision let too many subprime mortgage bonds get into the market. The investment banks purchased this big short, which was like a time bomb. This was the environment, which Mr. Paulson created to lead up to the financial crisis. In March 2008, the Wall Street fifth investment bank,
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Among these companies, AIG bear the greatest responsibility for the financial crisis of 2008. AIG is short for American International Group, which is a huge company cooperate with many companies or countries in the world. If AIG got trouble, it would spread to most of companies that led to the world’s financial crisis, especially Europe. The closure of systemic financial risk had no control, and the collapse of the financial system would cause massive unemployment, the end of countless old-age insurance and social security intermediaries. The consequences could not imagine. I think AIG was willing to be public ownership by the help of government, which no other firm would like to so. As the important of AIG, the government had to support AIG a great help, or the financial market would be weaker and family’s wealth would reduce. They borrowed secured by all assets of AIG, and the sale of company assets expected to be obtained the recovery in order to maintain a balanced budget. Therefore, this company was survived and still in existence. Warren Buffet played a very significant role in this financial crisis and he appeared three times in the movie. Firstly, he gave help for Lehman Brothers to get it out of the terrible situation, but Lehman Brothers rejected his deal. Secondly, AIG looked for help from Warren Buffet, but he rejected. Thirdly, he helped Goldman at the end, when Goldman got big trouble, and figured out the problem

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