Transcript: Diane Sawyer Interviews Treasury Secretary Timothy Geithner

SAWYER:
Perhaps the most bruising part of all of this for individual families, of course, jobs. And we have a new poll out that shows that 47 percent of Americans say that either a job loss or a cut in pay has affected their household. That's half of America. Looking at a Christmas they believe is going to be very different from the Christmas on Wall Street, where salaries are still sky high.

GEITHNER:
Well, that's the --

SAWYER:
Is that fair?

GEITHNER:
No, it's not fair. And that's the tragedy of financial crises. Is that the people who were responsible, they were careful, had nothing to do with the cause of the crisis, bear a huge amount of the burden -- for the crisis itself. And that's why it's so important in a crisis that governments do extraordinary things the contain the damage and bring growth back. And that's why it's so important that we reform this financial system so that these kind of things don't happen again. And that's why the president moved so early to propose sweeping, comprehensive new stronger rules of the road -- for the financial -- because, again, the -- the damage is so indiscriminate. And it's so unfair.

SAWYER:
We are told that at the G20, [French] President Sarkozy, [German Chancellor] Merkel, [British Prime Minister] Gordon Brown are all going to say, "Okay, let's just tackle the bonus issue and say that no bonuses are -- all bonuses should be limited to some proportion of actual earnings. Just get it done." Will you agree to that?

GEITHNER:
The president was ahead of those countries. Ahead of countries around the world in moving very quickly to propose strong reforms of compensation practice. He did so on February 4th. And the Congress has already legislated very tough conditions on compensation. But not enough has been done yet. It's very important these practices change now. And we're going to support, not just in the United States, but across the other major economies, because this is a very competitive world. If you don't do it everywhere then you won't be effective.

So, we're com -- we're committed to strong reforms of compensation practices. But that's only one part, Diane, of what it's going to take to make the system more stable, more fair in the future. So, we proposed, again, sweeping changes to bring derivative markets under oversight, stronger constraints on leverage and risk taking, and we're -- we expect to have broad support around the world for those proposals.

SAWYER:
What do you say to your friends on Wall Street about this? What do you say to them personally about the prospect of institutions taking $45 billion in taxpayer money and paying out huge amounts in bonuses to themselves?

GEITHNER:
Well -- well, we're -- we're not going to let that happen. We can't let that happen. And the Congress of the United States has legislated conditions on what companies that took exceptional assistance from the government can actually do in terms of compensation for senior executives. And that's a very important thing. It goes to the basic values of America. You know, in the United States, I think people don't mind rewarding success. But what they don't want to see is -- is individuals or companies rewarded for failure. And that's why we want to change the -- the system.

Page
Join the Discussion
blog comments powered by Disqus
 
You Might Also Like...