Paulson warns of bankruptcies, economic impact

Thursday October 9, 2008, 7:28 am WASHINGTON (AFP) - Treasury Secretary Henry Paulson warned Wednesday that more financial firms would go bankrupt in the United States and that recent market turmoil had "seriously impacted" the economy. Paulson cautioned that a 700-billion-dollar government rescue package for the financial sector approved last week would not mean an end to bankruptcies and that it would take several weeks to put in place. "One thing we must recognize -- even with the new Treasury authorities, some financial institutions will fail," Paulson said at a news conference. The aim of the rescue package is for the Treasury to buy up toxic debt being held by banks, but Paulson said it would be "several weeks before our first purchase." The new law "doesn't exist to save every financial institution for its own sake,"... [read full story]