Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

The US Treasury secretary was desperate to reassure foreign bondholders. Beijing was increasingly alarmed.23 In his memoirs, Paulson recorded: “I was talking to them [Chinese ministers and officials] regularly because I didn’t want them to dump the securities on the market and precipitate a bigger crisis. . . . And so when I went to Congress and asked for these emergency powers [to stabilize Fannie and Freddie], and I was getting the living daylights beaten out of me by our Congress publicly, I needed to call the Chinese regularly to explain to the People’s Bank of China, ‘listen this is our political system, this is political theatre, we will get this done.’ And I didn’t have quite that much certainty myself but I sure did everything I could to reassure them.”