Treasury Secretary Henry Paulson Supports Banks’ Steps on Subprime Debt

Today Treasury Secretary Henry Paulson commended some big banks that have made efforts to bring off balance sheet investments tied to their subprime mortgage loans back onto their books.

Paulson told reporters that “there is no doubt that greater disclosure, which has been driven by investors, is a positive.” He followed with “I think for a great number of financial institutions, standing behind their SIVs and taking them on their balance sheets is a very positive step and it will help move a process along.”

The backing by Henry Paulson comes as Citigroup announced today that they would pull 49 billion dollars in assets held by its structured investment vehicles onto its balance sheet. This movement which was also made by HSBC places doubt as to whether or not the plan to create a super structured investment vehicle to purchase assets from struggling investment vehicles would get off the ground.

In early November Paulson helped broker talks among large banks that lead to the decision to create this fund by Citigroup, JPMorgan Chase, & Bank of America to help bail prevent these subprime mortgages being sold at fire sale prices. When asked about the Super SIV plan Paulson stated “I’m optimistic we’re making progress here.” however he would not say whether he still thought one would be in place by year’s end.

To read more about Paulson welcomes bank’s steps on subprime debt head on over to Reuters.