Why do we have financial crises? Why do banks lose money? If history is any guide, it hasn't often been the result of speculative bets. It has been the result of banks making loans to individuals and businesses who can't pay them back.

Hank Paulson, obviously, had spent his career on Wall Street, had a deep knowledge of the Street, and also was a very forceful personality, had a very good relationship with the president, and was in a very different place, for example, than Ben Bernanke, who is an academic, quiet guy: spent most of his time thinking about monetary policy.

I think, with Hank Paulson, the concept of a bailout was anathema to him from day one. He was a Republican; he's a free marketeer. He believes in capitalism, and part of capitalism is believing in failure. And so the idea of bailing out an institution, I think, went against every part of him.

Andrew Ross Sorkin Quotes