Need more evidence of how panicked Washington is over the country’s financial system? Treasury Secretary Hank Paulson is tapping Goldman Sachs’ senior institutional finance executive Ken Wilson to advise him on how best to resolve the ongoing banking crisis.
Wilson, who has played a big part in helping Goldman steer clear of much of the mortgage nonsense that is sinking almost all the other big banks, will serve for a period lasting through at least January and will not receive any pay for his services. WSJ:
As chairman of Goldman’s Financial Institutions Group, Mr. Wilson has proved to be a big player in capital raisings and reorganizations across the banking sector. In joining Mr. Paulson, a close friend and longtime colleague, Mr. Wilson will try to address issues from a more macro perspective. The Treasury and Federal Reserve are grappling with how to respond to the threat of bank failures, flagging capital levels and crises of confidence in important institutions such as Fannie Mae and Freddie Mac.
President Bush placed a personal call to Wilson in which he pleaded with the Goldman guru to take the position. The administration may be betting that markets will respond favourably on the hope that Wilson can bring some of the magic that has preserved Goldman through the credit crisis to the public sector.