(Adds comments from television interview)
WASHINGTON, Sept 8 (Reuters) - U.S. Treasury Secretary Henry Paulson said on Monday it was difficult to know the ultimate cost of the Treasury’s weekend takeover of major mortgage financiers Fannie Mae and Freddie Mac, but he insisted taxpayers be repaid before shareholders.
“It’s very difficult for anyone to know, because of course many of us believe that this housing correction will stabilize in the months ahead and that we’ll turn the corner on housing and the economy will stabilize,” Paulson told Bloomberg Television a day after seizing control of the troubled companies.
“In that kind of scenario, it’s very possible for not only the taxpayer not to be hurt or to make money, but for the shareholders to have some value restored to them. I’m not going to paint this to be something where there’s not going to be taxpayer cost,” Paulson said.
He said he had been gratified by the support he has received from congressional leaders, but there would likely be “pushback” from Congress.
“No one likes to put taxpayers into situations like this,” Paulson said. “Government intervention is not something I came down here wanting to espouse, but it sure is better than the alternative.”
Paulson said there were concerns about Fannie Mae and Freddie Mac from foreign central banks as well as from domestic investors, but he said there were no threats by investors to pull out of the market for their securities.
“I wasn’t threatened by anyone. no one does that. if someone’s concerned, they just sell,” he said. (Reporting by David Lawder; Editing by James Dalgleish)
Our Standards: The Thomson Reuters Trust Principles.