Paulson turns to Goldman to unclog credit markets

Neel Kashkari, a former Goldman executive who has worked with Paulson at the department since July 2006, was chosen Monday as the interim head of the government's unprecedented effort to unclog the credit markets.

Kashkari, who was a vice president in Goldman's San Francisco office before joining the department, is one of four former executives from the firm now working feverishly to resolve the financial crisis.

Paulson also leans heavily on former Goldman Sachs executives Dan Jester and Ken Wilson, both financial institutions bankers, and Steve Shafran, who focused on corporate restructuring while at Goldman.

Shafran joined the department in February 2008, while Paulson brought Jester and Wilson on board in July and August, respectively, as the credit crisis worsened.

All four are members of a domestic finance team at Treasury that has worked nearly nonstop on the crisis for months.

Other members of the team without a Goldman background are: Anthony Ryan, the assistant secretary for financial markets; David Nason, assistant secretary for financial institutions; and Bob Hoyt, Treasury's general counsel.

Not everyone shares Paulson's enthusiasm for Goldman Sachs.

Robert A. Eisenbeis, a former director of research at the Federal Reserve Bank of Atlanta, said Paulson should have chosen someone more familiar with the government's response to the savings and loan crisis of the late 1980s and 1990s, when the Resolution Trust Corp., was created to dispose of billions of dollars of assets from bankrupt savings and loans.

"The kind of people that you need are the ones who were associated with RTC and had experience dealing with these large volumes of assets," Eisenbeis said. "Working at Goldman Sachs doesn't qualify you for doing this job."