Former Treasury Secretary
Henry Paulson was on CNBCthis morning talking about the recent financial crisis among other things.
Paulson, once the CEO of Goldman Sachs, was asked about JP Morgan and CEO Jamie Dimon.
And he only had praise for Dimon, pointing specifically to his role in JP Morgan’s decision to acquire investment bank Bear Stearns as it was on the brink of failure.
“It took someone with a great deal of courage and confidence and someone with the support of his board,” said Paulson.
Over a matter of days, Bear Stearns’s stock price got destroyed as investors and counterparties became increasingly aware of the bank’s exposure to the crumbling housing market.
Paulson noted that on one Thursday, the major Wall Street players were informed that Bear Stearns would effectively fail the next day.
With Paulson acting as a broker, Dimon led the acquisition and rescue of Bear Stearns in a matter of days.
“No one wants to make an acquisition under those circumstances that quickly,” said Paulson.
Had Bear Stearns failed “my belief is it would’ve been a real disaster,” he added. “I can’t even imagine.”