Q Mr. Secretary, it seems like your policy right now is that of a triaging some of the investment banks and hoping that that will solve the situation. Nevertheless, there are a lot of commercial banks that have their investment banking also probably exposed in many of the debt that is represented by the investment houses. Isn't the problem really much bigger than simply the investment banks? And isn't it really impossible to try and bail out that? And that if you go in that direction for the commercial banks, that you're still going to be facing the same problems in spite of what you do today?

SECRETARY PAULSON: Let me -- your question says, "Where is the root of the problem?" And I think I've consistently said that when we looked at our financial institutions the root of the problem lies in this housing correction. And until we stem the housing correction, until the biggest part of that is behind us and we have more stability in housing prices, we're going to continue to have turmoil in the financial markets.

And that is why the actions with respect to Freddie Mac and Fannie Mae are so extraordinarily important, not only to our capital markets, but to making sure we have plenty of financing in housing, because that, in my judgment, is going to be the key to turning the corner here.

seen at 09:00, 15 September in Whitehouse Press Briefings. Email this to a friend.
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