Paulson Stresses $250 Billion Buy Was No Nationalization

By: • Thu, Oct 16 2008, 9:21 AM

U.S. Treasury Secretary said the government's recent $250 billion purchase in shares of U.S. banks was "anything but a nationalization."

In an interview with CNBC Wednesday night, he described the government as a "passive" shareholder and emphasized the move was done to boost confidence, not bail out the firms.

On Monday, Paulson annoucned the goverment would be spending billions on shares in the nine largest U.S. financial firms, including JPMorgan and Citigroup.

"These are temporary investments to bring confidence to the system," he said.

Paulson said the drop in stocks seen today were evidence of the impact of the financial crisis on the real economy, and said the drop in retail sales seen today was unsurprising.

He said the U.S. economy will face some difficult months ahead, but that it is "resilient" and the governments recent action will work towards a recovery.

On the subject of reigning in executive pay, Paulson said none of those sitting at the table in his meeting with top banking CEO's this week argued against it.

When asked if he regretted allowing Lehman Brothers to fall, Paulson said there is nothing the Treasury could have done at the time, because Lehman Brothers had no interested buyers.

Finally, Paulson said after the U.S. presidential election he would stay on board to help with the transition of his programs.