Paulson said to be against govt funds for Lehman

WASHINGTON (AP) -- A person familiar with Treasury Secretary Henry Paulson's thinking says Paulson is "adamant" that there should be no government money involved in whatever deal comes together for Lehman Brothers.

The person, who spoke on condition of anonymity given the sensitivity of negotiations, said Friday that Paulson, who played a major role in engineering the Bear Stearns bailout, believes the Lehman situation is different in two critical aspects.

The person says Paulson believes that financial markets have been aware of Lehman's troubles for a long time and have had time to prepare.

A second difference is that the Federal Reserve is now allowing investment banks to borrow directly from the Fed just as commercial banks can do.

(Copyright 2008 by The Associated Press. All Rights Reserved.)


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