BY BENJAMIN MIRASKI, MEDILL NEWS SERVICE
Henry Paulson and Ben Bernanke are willing to try anything to solve the financial mess, but for every solution, it seems there is a dead end.
There was the Paulson “Blueprint” for regulatory reform, which so far has gone nowhere but to a committee hearing. Paulson wanted to redesign the entire financial system and shift more power to the Federal Reserve to be able to prevent more collapses like this.
There was an attempt to encourage private equity financing for banks, basically getting a bucket of money from rich investors to help shore up capital. However, that doesn’t look like it has legs either to generate enough capital, because of lack of expertise in the area, and regulatory issues. (More on that story at Medill Reports).
Now, Paulson has hired on Kendrick Wilson III, former partner at Goldman Sachs, to advise the Treasury Department. Wilson has been an advisor to Wachovia, Countrywide Financial, and National City (he helped to work out their $6 billion -$7 billion private equity deal), so there is a chance he might have some ideas.
When I was interviewing Don Edwards, partner at Flexpoint Partners LLC, about the private equity story, I was constantly told by him, “You know, this is complicated stuff.”
I can safely give that a label of “True.”
But at the same time, that complicated stuff, looking into the proposed solutions and seeing how the country can get itself out of the financial mess, is important stuff.
And it is refreshing to see that Paulson is not opposed to calling in his friends to bounce some ideas around with in order to solve the complicated problems.