Stocks Soar on Reports of Geithner as Treasury Secretary

After a brief stint at the International Monetary Fund, Geithner was selected in 2003 to lead the Federal Reserve Bank of New York. That bank, one of 12 across the country, is responsible for implementing the monetary policy established by the Federal Reserve in Washington, including maintaining the key Federal Funds interest rate that banks charge one another for overnight loans.

In this role, Geithner is the point person between Wall Street and the central bank. During the course of the recent financial crisis, he has earned the respect of hard-charging investment bank CEOs, even though he does not have a doctoral degree in economics or a master's in business administration and he has not worked on Wall Street.

Like Obama, he has risen even while bucking the normal route to success.

And like the president-elect, he has reportedly surrounded himself with a group of experienced advisers that include such economic luminaries as former Federal Reserve chairmen Alan Greenspan and Paul Volcker; former Treasury Secretaries Summers and Rubin; former New York Federal Reserve chief Gerald Corrigan; Merrill Lynch CEO John Thain; and well-respected financial leader and co-founder of private equity giant Blackstone Pete Peterson, with whom he meets on occasion over breakfast.

Candidate as New Treasury Secretary

Peterson ran the search committee that chose Geithner to lead the Federal Reserve Bank of New York. He said that during the vetting process, it became clear that beyond "unfailingly and unambiguously positive references," Geithner's colleagues and previous bosses felt he is "clear thinking and clear speaking in a crisis and not at all reticent to speak his views." Peterson added, "That is something important in a town like Washington."

"Tim would be terrific, cool-headed, experienced, and with kind of flexible mind needed to take the big steps required to deal with the current economic catastrophe," said Harvard professor Ken Rogoff who worked with Geithner at the IMF. "I think it is important also that the new administration not strangle the private sector, Tim is a centrist who would be sensitive to this issue."

Obama's choice for treasury secretary will face at least three major challenges: develop a more coordinated plan to resuscitate the nation's flailing economy, create new regulations to oversee the financial industry working closely with Congress and establish new trade policies with foreign partners especially China.

Geithner has firsthand experience with the recent economic bailouts, has worked with Congress, has a working knowledge of Chinese and has negotiated trade deals.

While young and perhaps lacking the experience of other candidates who have been suggested as possible choices for treasury secretary, what Geithner, a registered independent, may embody for the president-elect is the "change" that was a centerpiece of his campaign.

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