Sunday, April 05, 2009
Timothy Geithner
Treasury Secretary Timothy Geithner is pushing hard to be given broad new powers over the financial industry, arguing, “We’re having a major financial crisis in part because of failures of supervision.” This is the same Timothy Geithner who previously served, starting in October 2003, as head of the Federal Reserve Bank of New York—a post that was intimately familiar with the complex dealings of Wall Street firms and banks, and yet did little to stop the meltdown of the financial industry.
In September 2005, Geithner gathered together the nation’s top financial firms and their regulators to streamline buying and selling on the derivatives market. The effort focused on the mechanics of improving this little-known side of Wall Street—but missed the larger picture of the growing risks that major banks and firms were taking on at this time. Subsequently, as the housing market collapsed, the investments firms made in derivatives only worsened the crisis.
In his defense, Geithner has argued that he did not do more to reign in Wall Street because he took banking and investment leaders at their word when they told him things were fine in their financial houses. He has added: “I wish I had worked to change the framework, rather than to work within that framework.”
-Noel Brinkerhoff
As Crisis Loomed, Geithner Pressed But Fell Short (by Robert O’Harrow Jr. and Jeff Gerth, Washington Post)
Timothy Geithner (AllGov)
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