At Pershing Confab, Paulson Praises Advisors as 'Heroic' During Crisis

As for short-term U.S. economic conditions, Paulson says the recovery is underway and that the system is stable. However, in the long term, the country needs to systematically address the imbalance between consumer saving and spending, as well as the government's structural deficit. "We have to limit and reform benefits," he said.

The political system makes this difficult, and hence, may need reform, as well. "Voters want benefits but don't want to pay for them," he said.

"We must deal with our problems," Paulson explained. "That requires strong leadership. We also need growth and jobs."

In terms of financial reform, Paulson says our priority should be on developing a "systematic risk regulator" that can intervene "when the system is threatened."

In addition, he is upbeat on the ability of Congress to pull together a constructive reform package by early July. "And I think Wall Street should accept it," he said.

Finally, Paulson congratulated financial advisors in their roles as the unsung heroes of the financial crisis of '08-'09. "At a time when regulators and others made plenty of mistakes, your work was heroic," he concluded.