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Last Updated: Tuesday, 30 May 2006, 14:38 GMT 15:38 UK
Paulson is new US treasury chief
US Treasury Secretary nominee Henry Paulson

Henry "Hank" Paulson, the chairman of investment bank Goldman Sachs, has been nominated as the US treasury secretary.

He will take over the role from John Snow, who is resigning after three years in the job.

Mr Paulson has been chairman and chief executive of Goldman Sachs since May 1999, when the bank went public.

It is not his first time working for the White House. He was a member of the domestic council as staff assistant to President Nixon in 1972.

Wall Street giant

He joined Goldman Sachs in Chicago in 1974, and became chief executive in 1994.

The American economy is powerful, productive and prosperous and I look forward to working with Hank Paulson to keep it that way
President George W Bush

Outside of the financial world he is reputed to be an avid nature-lover, and is chairman of the board of The Nature Conservancy in the US.

Announcing his appointment, President George W Bush said Mr Paulson was highly experienced and capable.

"The American economy is powerful, productive and prosperous and I look forward to working with Hank Paulson to keep it that way," he said.

The US economy has enjoyed strong growth over the past year but concerns about growing inflationary pressures have worried investors, leading to extreme stock market volatility in recent weeks.

Deficit headaches

The Bush administration also faces the twin problems of a rising budget deficit and a trade imbalance which continues to set new records.

Iraq-related expenditure, allied to significant tax cuts, have pushed the budget even further into the red, rising above $400bn.

The trade deficit - the difference between what the US exports and imports - rose to $742bn last year, equivalent to 7% of total economic output.

The US trade gap has been fuelled by a sharp rise in imports from China and other Asian countries, which continue to outpace exports.

His deep understanding of national and global economic issues make him the best pick America could have hoped for
Senator Charles Schumer on Henry Paulson

Fears about the widening deficit have contributed to a significant fall in the value of the US dollar over the past month.

Critics of the Bush administration have accused it of fiscal indiscipline and have said it has not put sufficient pressure on China to revalue its currency, seen as the main cause of the trade imbalance.

Mr Paulson still has to be approved by the Senate, but has already won praise from the leading Democrat on the Finance Committee, Senator Chuck Schumer.

"His experience, intelligence and deep understanding of national and global economic issues make him the best pick America could have hoped for," Mr Schumer said of the nominee.

Third time lucky?

If confirmed, Mr Paulson will become President Bush's third treasury secretary during his time in office.

Paul O'Neill, the former boss of aluminium maker Alcoa, spent only eighteen months in the job before resigning at the end of 2002 amid reports of disagreements with key officials.

His successor, John Snow, a former law professor and railway executive, was seen as a safe pair of hands who could build bridges with Wall Street.

However, his departure has been widely anticipated for some time.


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