Senate backs Paulson's nomination

Mr Paulson's nomination has universal support

The US Senate has voted to confirm Henry Paulson, chairman of investment bank Goldman Sachs, as John Snow's successor as Treasury Secretary.

Mr Paulson's nomination was backed by both Republicans and Democrats after earlier speeding through the Senate Finance Committee.

He becomes the third Treasury Secretary under George W Bush, following after Mr Snow and Paul O'Neill.

The 60-year-old earned $35m (£19m) in salary from Goldman Sachs last year.

He will now have to give up not only his job at the bank but all his shares.

Deficit concerns

During his hearing before the Senate Finance Committee, Mr Paulson stuck close to current Bush administration policies.

He said the US should reduce its giant $742bn budget deficit, but ruled out rising taxes to help fix the problem; and said he would continue efforts to get China to revalue the yuan.

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.

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

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.

Jittery stock market

President Bush has described Mr Paulson as highly experienced and capable.

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.

Unease at the continuing budget deficit has also contributed to a significant fall in the value of the US dollar over the past month.

Paul O'Neill, the former boss of aluminium maker Alcoa, spent only 18 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 after three years in the job had been widely anticipated for some time.