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Treasury Secretary Henry Paulson said the U.S. government's banking rescue plan is designed to spur private investment in financial institutions, and told CNBC that the FDIC interbank lending guarantee that's part of the plan will kick in immediately.
“When the government is coming in, it’s not coming in to squash private investment,” he said. “No, it’s encouraging private shareholders to invest in [troubled] banks.”
The FDIC guarantee on interbank lending lasts through June of next year. The program is meant to increase confidence in the banks “so they can be proactive in deploying their capital,” Paulson said.
Paulson denied any contentiousness at the emergency meeting Monday attended by many of the nation's largest and most powerful financial institutions. Paulson, who noted that the firms represented at the meeting manage 54 percent of U.S. assets and 50 percent of U.S. deposits between them, called the exchange of ideas there "candid."
(See the accompanying videos for the full interview with Henry Paulson.)
"What I said to them is, 'This is about the United States of the America; it’s about our economy; it’s about our banking system,'" he said. “This is a program for healthy banks; this is not about failure.”’
Paulson also emphatically said that he would make himself available to work with the economic transition team of whichever presidential candidate takes office next office.
"This is going to be a first-rate transition," he said
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