Throw Down: Geithner Blasts Government Regulators for Criticizing Administration’s Financial Reform Measures

Aug 4, 2009 10:17am

ABC News’ Matt Jaffe reports: The Obama administration’s sweeping financial regulatory reform proposals have been met by criticism from lawmakers and the financial industry, but dissent from fellow federal regulatory agency heads was too much for Treasury Secretary Tim Geithner to take. Last Friday, Geithner said enough is enough, using a meeting at the Treasury to throw down the gauntlet to officials from other agencies. “We planned this meeting as a venue to deliver a tough message to regulators that we should work together to get reform done – and focus less on protecting turf,” said Treasury spokesman Andrew Williams. As reported by the Wall Street Journal, Geithner directed an expletive-laden critique at the heads of the Federal Reserve, the FDIC, the SEC, and other agencies. One source familiar with the meeting said, “It was a sh*t storm." In recent weeks, Fed chief Ben Bernanke, FDIC chair Sheila Bair, and SEC boss Mary Schapiro have all expressed reservations about various parts of the administration’s plans, which would shift responsibilities among the agencies – some would gain power, some would lose power, and some would gain power in certain areas but lose in others. In public, Geithner has downplayed the differences between the agencies, taking a far more moderate tone. At a House Financial Services Committee hearing on July 24, Geithner told lawmakers, “They are doing what they should, which is to defend the traditional prerogatives of their agencies.” But in private, judging by the tone of last Friday’s meeting, Geithner left no doubt that the time for the agencies to air their views had run out. In a calculated attempt to silence the dissenters, the Treasury chief made it clear that the in-fighting had to stop. Whether it will or not is another matter, but the first sign may come this morning before another congressional hearing. Representatives from some of these regulatory agencies – including Bair from the FDIC – are testifying at a Senate Banking Committee hearing on the regulatory reform overhaul. — Matt Jaffe

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