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Tim Geithner
Treasury Secretary Who Bailed Out Wall Street; NY Fed President Who Failed to Regulate It
U.S. Treasury Secretary (2009-2013); President of the Federal Reserve Bank of New York (2003-2009)
Overview
Timothy Franz Geithner served as the 75th United States Secretary of the Treasury from 2009 to 2013 and as President of the Federal Reserve Bank of New York from 2003 to 2009, meaning he held the two most critical financial regulatory positions during both the buildup to and the response to the 2008 financial crisis. As NY Fed President, Geithner oversaw the very Wall Street banks whose reckless behavior caused the crisis, yet failed to take meaningful regulatory action as leverage ratios soared, lending standards collapsed, and the shadow banking system expanded without oversight. When the crisis hit, Geithner was one of three key architects (alongside Hank Paulson and Ben Bernanke) of the bailout strategy that rescued Wall Street while leaving homeowners to fend for themselves. As Treasury Secretary under Obama, Geithner oversaw TARP implementation and the design of the Home Affordable Modification Program (HAMP), which he privately described as a way to "foam the runway" for banks by spreading out foreclosures over time rather than preventing them. Of 4 million homeowners approved for HAMP trial modifications, fewer than 1.8 million received permanent modifications. Geithner consistently opposed proposals to break up "too big to fail" banks, to condition bailout funds on executive compensation limits, or to use TARP authority for large-scale mortgage principal reduction. His approach prioritized stabilizing the banking system over holding individuals accountable, not a single top Wall Street executive was prosecuted during his tenure. After leaving Treasury, Geithner became President of Warburg Pincus, a private equity firm managing $73 billion in assets, exemplifying the revolving door between Wall Street and its regulators.
Key Affiliations
U.S. Department of the Treasury
75th Secretary of the Treasury (2009-2013)
agency
Federal Reserve Bank of New York
President (2003-2009); oversaw Wall Street regulation during crisis buildup
agency
Warburg Pincus
President and Managing Director (2014-present); private equity firm with $73 billion in assets
corporation
International Monetary Fund
Senior official (2001-2003); Director of Policy Development and Review
organization
Controversies & Concerns
As NY Fed President, failed to regulate the Wall Street banks whose reckless behavior caused the 2008 financial crisis despite holding primary supervisory authority over them
Co-architect of bank bailout strategy (with Paulson and Bernanke) that rescued Wall Street while millions of homeowners lost their homes to foreclosure
Described HAMP, the supposed homeowner relief program, as a way to "foam the runway" for banks, privately admitting the program was designed to help banks, not homeowners
Of 4 million homeowners approved for HAMP trial modifications, banks permanently modified fewer than 1.8 million, often collecting fees during trial periods then foreclosing anyway
Opposed proposals to break up too-big-to-fail banks, impose executive compensation limits on bailout recipients, or pursue large-scale mortgage principal reduction
No top Wall Street executive was criminally prosecuted during his tenure as Treasury Secretary despite extensive evidence of fraud documented by the FCIC
AIG counterparties (including Goldman Sachs) were paid 100 cents on the dollar on credit default swaps under NY Fed arrangements Geithner oversaw, a windfall for banks at taxpayer expense
After leaving Treasury, became President of Warburg Pincus ($73 billion private equity), exemplifying the revolving door between Wall Street regulators and the financial industry
Failed to pay $35,000 in self-employment taxes from 2001-2004 while working at the IMF, an issue that nearly derailed his Treasury nomination
Related Investigations (1)
Known Associates & Connections
Henry Paulson
Treasury predecessor during financial crisis; coordinated bailout strategy
Ben Bernanke
Fed Chair during crisis; Geithner reported to Bernanke as NY Fed President
Robert Rubin
Mentor and predecessor who shaped Wall Street-friendly policy; Geithner worked under Rubin at Treasury in the 1990s
Barack Obama
President who appointed Geithner Treasury Secretary; Geithner's approach shaped Obama administration's crisis response
Larry Summers
Fellow Treasury veteran and Obama economic advisor; Summers mentored Geithner in the 1990s
Sources & Documentation
4 documented sources from official records, investigations, and reports
Personal Information
- Born
- August 18, 1961
- Birthplace
- Brooklyn, New York, USA
Education
- •Dartmouth College, BA Government and Asian Studies (1983)
- •Johns Hopkins School of Advanced International Studies, MA International Economics and East Asian Studies (1985)
Key Timeline
August 18, 1961
Born in Brooklyn, New York. Father worked for USAID; family lived in Zimbabwe, India, Thailand, and China during childhood
1988
Joins the Treasury Department; works under Robert Rubin and Lawrence Summers on international financial crises
2001-2003
Serves as Director of Policy Development and Review at the International Monetary Fund
November 2003
Becomes President of the Federal Reserve Bank of New York at age 42, the youngest person in the role. Assumes primary regulatory authority over the largest Wall Street banks
2003-2007
As NY Fed President, oversees Wall Street during the buildup of catastrophic leverage and subprime exposure. Takes no meaningful action to restrain the risks
March 2008
Orchestrates the emergency sale of Bear Stearns to JPMorgan Chase with $29 billion in Fed guarantees
September 12-14, 2008
Hosts emergency weekend negotiations at the NY Fed attempting to find a buyer for Lehman Brothers. No rescue materializes
September 16, 2008
Approves $85 billion emergency loan to AIG. AIG uses funds to pay Goldman Sachs $12.9 billion at 100 cents on the dollar
January 26, 2009
Confirmed as 75th Secretary of the Treasury despite controversy over unpaid personal taxes
2009-2010
Oversees TARP implementation. Privately describes HAMP as a way to "foam the runway" for banks. Opposes breaking up too-big-to-fail banks
January 2013
Leaves Treasury. No top Wall Street executive has been prosecuted during his tenure
March 2014
Becomes President of Warburg Pincus, a $73 billion private equity firm, fully transitioning to the financial industry he previously regulated