President George W Bush has chosen the most highly paid chief executive on Wall Street, Goldman Sachs's Henry Paulson as US treasury secretary, in succession to John Snow, whose resignation was announced yesterday.
Mr Paulson (60), who has run the securities firm since it went public in 1999, earned $38.3 million (€29.7 million) last year, after the company's profits soared to $5.6 billion.
Mr Bush said the new treasury secretary, whose appointment must be confirmed by the Senate, would make "a superb addition" to his cabinet.
"He has a lifetime of business experience, he has an intimate knowledge of financial markets and an ability to explain economic issues in clear terms. He's earned a reputation for candour and integrity," Mr Bush said.
Mr Paulson, who was previously an official in the Nixon White House, said his 32 years in finance gave him "a keen appreciation for the role that capital markets play in driving economic growth" throughout the world.
"Of course, the whole world is dependent upon the US economy as a major engine of its growth. And our economy's strength is rooted in the entrepreneurial spirit and the competitive zeal of the American people, and in our free and open market.
"It is truly a marvel, but we cannot take it for granted. We must take steps to maintain our competitive edge in the world," he said.
Rumours of Mr Snow's departure from the post he has held since February 2003 have circulated in Washington for more than a year. His resignation is the latest in a succession of changes in the White House since Joshua Bolten replaced Andrew Card as chief of staff last month.
Mr Paulson had previously turned down an offer for the position. Many on Wall St had suggested no such senior banker would not want the job because driving forward far-reaching economic policy, such as tax or entitlement reform, would prove difficult during the latter stages of a second-term presidency.
However, insiders said Mr Paulson was unlikely to have accepted the job without some assurances that he could effect change.
Mr Snow yesterday defended the administration's economic policies, including controversial tax cuts that have helped push the budget deficit to record levels.
"The US economy today is growing and expanding at a rate well above the rest of the industrialised world. Businesses are investing, productivity growth is strong, and millions of new jobs have been created with rising wages," he said.
Mr Paulson, whose net worth is estimated at more than $500 million, is a committed conservationist, who gave $100 million to a family foundation dedicated to conservation and environmental education.
Renowned in Goldman Sachs as a ferociously hard worker, Mr Paulson has visited China more than 70 times in the last 15 years.
One of his greatest challenges as treasury secretary will be to persuade China to allow the yuan to appreciate at a faster pace and to fend off calls from Congress for penalties against China. -(Additional reporting, Financial Times service)
