“Banks remain steady despite the economy crisis” says Paulson

According to Treasury Secretary Henry Paulson, the U.S. economy necessitates a long period of time to recover from its slowdown. However, the banking system seems to be stable regardless of the home mortgage conflicts that move along the way. During the Sunday morning news interviews Paulson was so eager to say that the Congress would finally agree the Bush administration’s proposal for power to prop up Fannie Mae and Freddie Mac, the two distressed mortgage tycoons. On Tuesday, the treasury secretary will deliver a talk on stocks and the economy in New York City. Moreover, he will be delivering that speech to bolster anxious markets and stockholders.
 

Treasury Secretary Gives Positive Assurance

Paulson foresees the slow growth and according to him, “I think it’s going to be months that we’re working our way through this period.” This was his stated on “Face the Nation” on CBS. Soaring of energy prices greatly affect the slowdown, making it worse. But Paulson says that the housing market will be the solution to recover from this economy crisis. Although the mortgage lender IndyMac bank became a failure, the U.S. banking problems are still at hand. The capture of the bank by Federal regulators last July 11 was considered to be the third-largest bank failure in the history of U.S.

It is evidently seen in the eyes of aggravated depositors and this indicates the U.S. home financing catastrophe. Paulson emphasized that their banking system is safe and sound despite these instabilities and crises the nation is facing. Paulson told CBS earlier that the number of disturbed banks would increase however, this can still be managed. Regulators and managers are working hard on attending to this matter. It is said that five major U.S. banks have already met failure this year. This is comparable to the industry crisis during the 1980’s which has an annual average of about two hundred fifty. He reassured that 99 percent of the 8,500 banks in the United States are intact and holding almost all of the bank assets which greatly signifies boosting monetary stability.

Unfortunately, the number of troubled banks on the Federal Deposit Insurance Corporation’s watch list grew to ninety at the end of the last quarter. Paulson said that U.S. financial markets should be given assurance to relive the housing industry to support the economy. It was a rewarding action that the Congress approved the plan made for Fannie Mae and Mac, which spearheaded the high percentage of U.S. home loans.