GEITHNER: Well, you know, he spoke to that earlier this week. What he did do, though, and this was enormously effective was he went and used the authority he had to change behavior going forward. So you didn't have taxpayers' money after he had that authority go to enrich the people that had brought the system to the edge of collapse.
Now, what he's also done and what our responsibility is to make sure these firms can never again go back to paying their executives to take risks that could imperil the stability of the country as a whole, the economy as a whole. So, he's done a great job. Very tough judgments. Limited authority in some cases, but he uses authority very well.
TAPPER: Why is it that U.S. automakers when they received bailout funds had to take serious steps to take -- what are called "haircuts"? Salary reductions, layoffs. And banks didn't. Banks -- I mean, you had Ken Feinberg supervising their salaries as long as they were receiving TARP money, but then they paid the money back and did whatever they wanted. How come banks didn't have to do that?
GEITHNER: Great question. And that's why we have financial reform. Because we had for the country as a whole, a process of bankruptcy for dealing with failure. We did not have a similar process that could deal with the failure of large financial institutions.
That was a tragic failure for the country because what it meant is when firms like AIG or Lehman or Bear Stearns manage themselves to the point where they could not survive without the government, we had no tools like bankruptcy to force them to restructure and protect the taxpayer from losses. But what this financial reform will do is to give us that authority. A type of bankruptcy regime that we can use for these large institutions because, again, this is a basic commitment in the bill. Banks should be paying for the cost of bank failures. We don't want the taxpayers paying for the cost of bank failures. And we should have the ability to dismember them, put them out of existence, put them out of their misery without it causing catastrophic damage to the economy as a whole.
TAPPER: The Treasury Department issued a currency report and concluded that China was not manipulating its currency. Very few legislators on Capitol Hill seem to agree with that report, and I'm wondering if you agree with it.
GEITHNER: Well, what China did, and this is the important thing, after a long period of pegging their currency to the dollar, holding their currency constant against the dollar, they have now started to allow it to move upward again to appreciate, to strengthen their response to market forces.
Now, of course, they just started that process. It's just the beginning, and what matters to us and to all of China's trading partners is that they let that currency appreciate, as they did the last time they allowed us to move. What matters to us is how fast and how far they let it go.
TAPPER: But you stand by the idea, stand by the assertion, that China is not manipulating its currency?
GEITHNER: Oh, absolutely. But again, they begin the process of letting it start to reflect market forces. That's very good for China. It's very good for the United States.