Geithner: Govt. Needs Better 'Crisis Management' Tools

June 17, 2009 -- Shortly after President Barack Obama proposed the biggest financial regulatory overhaul since the Great Depression in a speech at the White House today, Treasury Secretary Timothy Geithner warned that the government still lacks the "capacity to deal" with a major collapse in the financial sector.

"Even today, we still don't have the capacity to deal with a future AIG, a future Lehman," Geithner told "Nightline" anchor Terry Moran in an exclusive interview in Washington, D.C. "That's why we're proposing these better tools for crisis management. So it was a tragic thing for the country, the government did not have the ability at that point.

"We need to prevent a crisis like this from ever happening again. ... You know, this crisis was enormously damaging to the basic lives, businesses, people across the country, across the world, and our basic obligation and our core mission is to make sure we put in place safeguards to make sure this never happens again."

Watch Terry Moran's full interview with Timothy Geithner on "Nightline" tonight at 11:35 p.m. ET

The debate over the regulatory package, which includes new executive powers and a new government regulatory agency, began even before its official rollout today. Consumer groups hailed the proposal as providing important new protections, while Republicans on Capitol Hill and lobbying groups voiced opposition to the government expansion.

The Treasury secretary addressed those criticisms and returned to the roots of the financial meltdown, saying banking executives showed "stunningly bad judgment" in the lead-up to the crisis.