U.S. Treasury Secretary Henry Paulson on Monday pledged to take steps to maintain stability in U.S. financial markets, as the failure of U.S. banking giants caused global financial markets to plunge. “I am committed to working with regulators and policymakers—including Congress—to take necessary and appropriate steps to maintain the stability and orderliness of our financial markets,” Paulson said in a statement. “I will engage with regulators and policymakers around the world to that end.” “I am confident in the resilience of our capital markets, and in the commitment of U.S. regulators and market participants to work together through this difficult period,” the Treasury chief wrote. Lehman Brothers declared bankruptcy Monday after efforts to find a buyer collapsed. Bank of America purchased Merrill Lynch in a $50 billion deal, insurance giant AIG was reported to have sought a huge emergency loan, and a group of banks established a $70 billion global emergency fund. Meanwhile, the U.S. Federal Reserve (Fed), the European Central Bank, and the Bank of England injected tens of billions of dollars into money markets. Paulson, who participated in weekend discussions in New York City, said actions resulting from the meetings “will be critical to facilitating liquid, smooth functioning markets, and addressing potential concerns in the credit markets.” “I particularly appreciate the efforts of market participants who came together this weekend and initiated a set of steps to facilitate orderliness and stability in our financial markets as we work through this extraordinary environment,” the Treasury chief said. “Today, we are looking forward. This weekend's discussion made clear that both market participants and regulators in this country and abroad recognize the need to support market stability and remove uncertainty as they address current challenges,” Paulson said.
