In Geithner We Trust Eludes Treasury as Market Fails to Recover (Bloomberg)

[chill_wind]

In Geithner We Trust Eludes Treasury as Market Fails to Recover


By Yalman Onaran and Michael McKee

Feb. 25 (Bloomberg) --

It was 2004 and Tim Geithner, president of the Federal Reserve Bank of New York, had a message for the Federal Open Market Committee in Washington. He told his 18 colleagues gathered around the long mahogany table that a clearinghouse was needed to monitor risks in the burgeoning $5 trillion market for credit-default swaps -- the over-the-counter derivatives that would later spin out of control and help take down Wall Street.

In a move that may have foreshadowed his role as President Barack Obama’s Treasury secretary, Geithner over the next two years nudged financial firms to voluntarily clear a backlog of swap trades. They stopped short of creating a clearinghouse to bring more transparency to the market.

“Geithner was making noise on reining in derivatives, but he didn’t push hard enough,” says Jane D’Arista, a former economist at the Congressional Budget Office in Washington and a longtime Fed observer. “Maybe he’ll be more forceful now that he’s in a position with real power. But I’m not so sure.”

From his years as a Dartmouth College student and mid-level Treasury official through his stint at the New York Fed, Geithner, 47, has thrived as a backroom negotiator and conciliator. Now, as he struggles to rescue Wall Street from a crisis that happened on his regulatory watch, investors and economists question whether the 75th Treasury secretary can transform himself into a bold leader equal to the challenges ahead.

Wall Street executives have cheered Geithner’s nomination.

more: http://www.bloomberg.com/apps/news?pid=20601109&sid=aLhs5Byln00k&refer=home

Interesting read (longish).

[TwilightGardener]

1. People should be allowed more than four or five weeks on the job before we make

sweeping pronouncements about their performance. (This includes Obama, as well.)

[chill_wind]

4. Just curious:. What points of fact

in the article do you feel are incorrect?

[chill_wind]

2. ?

[chill_wind]

3. edited- to move post