'This Week' Transcript: Geithner

GEITHNER: Excellent question. But actually, the theory, the basic strategy in this reform bill does not rest on the wisdom of regulators. It does two very important things, though. It'll help consumers make better choices with better disclosure, much more clarity about the terms of the credit card contract or mortgage loan so they get better protection against the risk of being taken advantage of.

But it also gives authority we did not have to put in place strong constraints on risk taking on all the nation's largest institutions. That authority did not exist before and it was central to what caused the near collapse of the financial system.

TAPPER: Will these powers have allowed you, if had been Secretary of Treasury at the time or your predecessor Hank Paulsen to have staved off the financial crisis?

GEITHNER: I don't think there's any reform bill, no law in any country that can prevent all financial crises. But if we had had this authority as a country, it -- we would have been able to limit risk taking and deal with the trauma that came from the stakes these firms made much more easily. It would have caused much less damage. It would have been much less severe, caused much less damage to the basic fortunes Americans and businesses across the country and to our -- and our long term fiscal position.

TAPPER: You eluded to the Consumer Financial Protection Bureau that was created. Many liberals and labor unions and consumer groups say there's one person they want for that job. Elizabeth Warren. The woman who thought it up.

Do you support that idea?

GEITHNER: She is a enormously effective advocate for reform. Probably the most effective advocate for reform for consumers for consumer protection in the country. She has huge credibility and she played a decisive role in helping make the public case for reform and she was early on this, way ahead of everybody else.

TAPPER: 2007 she wrote that -- that -- she came up with that idea.

GEITHNER: And even before that she was pointing out to people the risks of what's happening in the housing market and credit market. So she has enormous credibility and she'd be an excellent leader of that institution. But that's a decision the President's going to make.

TAPPER: Some in the White House say that -- that you've had concerns about her appointment because she she's been a sharp critic of you, she's been a sharp critic of Treasury Department policies. Do you have concerns?

GEITHNER: I don't have concerns and I should say in that context that she has been playing a very important role in providing oversight over the programs we put in place to break the back of this financial crisis. You know, put out this financial fire.

TAPPER: Ken Feinberg issued a report including that U.S. banks paid out $1.6 billion in unwanted -- unwarranted bonuses to top earners during the height of the meltdown. Seventeen banks made these payouts after getting TARP funds, after getting bailout funds.

GEITHNER: It's a -- you know, it really is an incredible thing. And that's what he reminded of which is in early '09, on the basis of performance in '08, in the middle of the worst financial crisis since the Great Depression, firms that had taken support from the government because they could not manage without it still paid out substantial sums of money to people who made the decisions that caused the crisis.

TAPPER: Is there nothing that can be done about this?

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