Geithner Not Leaving Anytime Soon

U.S. Treasury Secretary Timothy Geithner told President Obama Friday that he will stay at his position at least through the 2012 election.

In late June, people close to Geithner reported that he would resign once the debt limit was raised this month. Congress voted on August 2 to raise the limit, and Obama signed the bill hours later.

Geithner, 49, the sole remaining member of Obama’s original economic team, agreed to stay at Treasury after receiving a personal request from Obama. 

“I believe in this president,” said Geithner during an appearance on NBC this weekend. “If a president asks you to serve, you have to do it.”

“The President asked Secretary Geithner to stay on at Treasury and welcomes his decision,” White House spokesman Jay Carney said in a statement. 

Not everyone is happy about Geithner’s decision, however. 

Rep. Allen West (R-Fla.) told Fox News Monday morning that Geithner should be replaced due to his lack of intelligence and a basic understanding of what is occurring with the economy.

“I don’t think that Timothy Geithner really has a handle on the fiscal situation here in the United States of America,” West said. 

Geithner’s decision was made public hour before credit rating agency Standard & Poor’s downgraded the U.S. debt from AAA to AA+.

More Regulation Necessary, Says Treasury Duo

By Benny Martinez
University of New Mexico/Talk Radio News Service

Treasury Secretary Timothy Geithner told the Federal Crisis Inquiry Commission Thursday that the financial crisis the United States is currently struggling to resolve was caused by high-risk practices in the finance market and the failure to regulate them.

“A principal cause of the crisis was the failure to provide legal authority to constrain risk in this parallel financial system,” Geithner said.

Contrary to the belief that the financial crisis resulted from a “shadow banking system” that included institutions like Bear Stearns and Lehman Brothers, Geithner said that “it was not hidden, [in fact], it was operating in broad daylight [and] unlike the moral hazard risk in banks, this market grew up without government insurance or any history of governmental support in a crisis.”

Former Treasury Secretary Henry Paulson joined Geithner and said that the current financial crisis cannot be attributed to only one failure in the system.

"Many mistakes were made by all market participants, including financial institutions, investors, regulators, and the rating agencies, as well as by policy makers," said Paulson.

Paulson said that regulators need to implement a stronger arsenal of tools in order to prevent another crisis. The former Treasury Secretary emphasized that lawmakers need to take precautionary measures in tight regulations.

According to Paulson, although regulation of the “shadow banking system” needs to improve, it remains a vital component in reviving America’s struggling economy.

Treasury Secretary Geithner: Tax On Big Institutions Will Offset TARP Costs

By Justine Rellosa- Talk Radio News Service

Treasury Secretary Tim Geithner cast levying a tax on large financial institutions as a significant step in offsetting the costs incurred through the Troubled Assets Relief Program (TARP).

“This was an expensive financial crisis. It caused a lot of damage to our long term fiscal position,” Geithner said Tuesday during his testimony before the Senate Finance Committee.

Geithner explained that the affected firms are made up of those that have over $50 billion in assets and are eligible for emergency assistance programs.

“We thought the fairest way to do this was to apply the fee to the firms that contributed the most to the crisis.”

The tax will be collected throughout the decade and ultimately seeks to gather $90 billion.

Housing Market Will Face Reforms Within Months, Says Treasury Secretary Geithner

By Benny Martinez - University of New Mexico/Talk Radio News Service

Treasury Secretary Timothy Geithner told the House Financial Services Committee that reforms to the housing finance system should come within months, not years.

Geithner said that changes are necessary to stabilize the housing market and added that a number of proposals have already been put forth as part of financial regulatory reform.

Reform to the two major government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, must expand to the reform of broader housing policies, according to Geithner.

“Any restructuring of Fannie Mae or Freddie Mac is part of the reform of the wider housing finance system,” Getihner said.

The Treasury Department and the Obama administration intend on developing a comprehensive reform plan for delivery to Congress in the coming months. A list of questions to acquire input from all stakeholders will be submitted by April 15, 2010.

Geithner said that the administration “will seek to work closely with the Congress, on a bipartisan basis, prior to finalizing a comprehensive reform plan.”

Geithner Urges Congress To Act On Financial Regulatory Reform

By Leah Valencia, University of New Mexico - Talk Radio News Service

Treasury Secretary Timothy Geithner urged Congress to act quickly in executing a comprehensive overhaul of the financial regulatory system, telling members of the House Financial Services Committee on Wednesday that, "Time is the enemy of reform."

Geithner said lawmakers must act to correct the regulatory problems that have left the financial system in disarray.

"As some normalcy returns to our financial system and our economy, we cannot let it be cause for complacency," he said in a hearing on Capitol Hill. "We simply cannot walk away from the worst financial crisis since the Great Depression and not do everything in our power to reform the system."

Geithner explained that the regulatory reform plan proposed in June by the Obama administration aims to achieve three main goals, including providing consumer protection, creating a new financial system less prone to crisis and safeguarding taxpayers from bearing costs of future crises.

A key aspect of the proposal seeks to merge the Office of the Comptroller of the Currency and the Office of Thrift Supervision into a new consumer financial protection agency. Lawmakers from both parties raised concerns about such an agency.

House Financial Services Chairman Barney Frank (D-Mass.) wrote proposed changes to the consumer agency in a memo Tuesday. The changes excluded a range of non-financial businesses, such as retailers and auto dealers, from oversight by the agency. Frank also said he plans to fund the agency in a way that would not burden financial institutions, and will no longer require them to offer "plain vanilla" financial products, such as 30-year fixed mortgages.

Geithner said in his testimony that all institutions providing financial credit should be subject to the same regulation and credit standards as banks, but he did not indicate whether these standards would extend to non-financial businesses

"If you are in the business of providing financial credit and you are competing with banks and thrifts to do that, there should be a common set of standards," he said. "In general, we're very supportive of the changes proposed by the chairman."

Frank said he will be holding a series of hearings on the regulatory proposal in coming weeks and plans to have legistlation in the House and Senate by the end of the year.

"This is going to be a very time-consuming committee in October and November," Frank said.

The new legislation would mark the most drastic governance changes for financial institutions implemented in seven decades.