Tuesday, Dec. 02, 2008

Treasury Secretary: Timothy Geithner

When Timothy Franz Geithner (pronounced GITE-ner), 47, began work at the New York Federal Reserve in November 2003, he was met with quite a bit of resistance. A number of insiders saw him as a poor choice; Tom Schlesinger, executive director of Virginia-based think tank the Financial Markets Center, noted that "there is very little in Geithner's resume that shows experience in regulatory issues," lamenting that his appointment "raises questions about the willingness of the New York Fed to aggressively supervise financial holding companies in its territory." Since Nov. 21, though, when word leaked that Geithner would be named Treasury Secretary in Barack Obama's Administration, reviews have been somewhat more positive. (See pictures of Barack Obama's campaign behind the scenes.) He's now an insider himself, knee deep in the unfolding economic crisis, who has worked closely with former New York Fed chief Gerald Corrigan, former U.S. Fed chief Alan Greenspan and current Treasury Secretary Henry Paulson and head of the Federal Reserve Ben Bernanke.

But Geithner's confirmation as Treasury Secretary hit a new snag on Jan. 13, when reports revealed that he had failed to pay about $34,000 in taxes when he was employed by the International Monetary Fund. Geithner maintained that he had no knowledge of the error and Obama quickly came to his defense saying, "My expectation is that Tim Geithner will be confirmed." The debts were subsequently paid, but Geithner still must answer to the Senate for the incident. His official nomination hearing is set for Jan. 21.

Fast Facts

• Born August 18, 1961, in New York, he traveled widely with his family (his father was an international development official) and has lived in East Africa, India, Thailand, China, and Japan. He attended high school at the International School of Bangkok

• Graduated from Dartmouth College, where he studied both Chinese and Japanese, in 1983 with degrees in government and Asian studies. Geithner received a master's in international economics and East Asian studies in 1985 from Johns Hopkins

• Married Dartmouth classmate Carole Sonnenfeld in 1985; they have a son and a daughter

• Joined the Treasury Department as a career staff official in 1988 where he worked in three administrations for five Secretaries of the Treasury in a variety of positions

• He was named President and CEO of the New York Federal Reserve on November 20, 2003. As President he oversees the Reserve Bank as it monitors banks in New York, New Jersey, and Fairfield County in Connecticut, extends credit to banks, and conducts foreign exchange market intervention

•Was directly involved in the move that allowed JP Morgan Chase to acquire Bear Stearns with $29 million provided by the government earlier this year. Also worked as part of the deal that saved AIG from failing

•Would not grant Lehman Brothers the right to become a bank-holding company — a status given to both Morgan Stanley and Goldman Sachs just days after Lehman filed for bankruptcy

• According to a profile in The Economist, Geithner "snowboards, has tried skateboarding and exudes a sort of hipster-wonkiness, using 'way' as a synonym for 'very' as in 'way consequential'"

• Worked briefly as an event photographer in college, having gained an interest in photography in high school

• Geithner also fly-fishes, surfs and plays tennis

Quotes About

"People don't understand how important those relationships are, especially when you've got to deal with complex and difficult situations. Relationships are critical, and Tim has done a terrific job of developing those relationships." — Gerald Corrigan, a former New York Fed chief and now a managing director of Goldman Sachs, on Geithner's relationships with senior government financial officials (Portfolio, June 2008)

• "If Tim Geithner ... gets a top spot in Barack Obama's cabinet we are done, finished, kaput. It is that simple," — CNBC commentator Jim Cramer, blaming Geithner for allowing Lehman Brothers to file for bankruptcy in September (BBC, November 23, 2008)

• "He's never taken risk, never worked as a trader or in credit, or even had operational responsibility in a bank," — Chris Whalen, a vocal critic of the Fed and a managing director of Institutional Risk Analytics, a consulting firm (Portfolio, June 2008)

• "Tim at 47 looks 32, and you need to have in these compelling times gray hair and gravitas. It's not that he's not qualified; it's how he looks." — Ken Duberstein, onetime chief of staff to Ronald Reagan (Washington Post, November 22, 2008)

• "He said, 'Justin, you have to realize, we live for this. We live for these kinds of crises.'" — Justin Rudelson, a friend of Geithner's from Dartmouth, recalling Geithner's response when asked if he was getting enough sleep (Associated Press, November 21, 2008)

• "He does not try to blow you away, to overwhelm you." — Henry Kissinger, Geithner's first boss, whom Geithner helped to research a book (Portfolio, June 2008)

Quotes From:

• "The fact that the banks are stronger and risk is spread more broadly should make the system more stable. We can't know that with certainty though. We'll have a test of that when things next threaten to fall apart." (The New York Times, February 9, 2007)

• "We're going to need to change a whole bunch of aspects of our financial system. We should not have a system that's this fragile, that causes this much risk to the economy." (Portfolio, June 2008)

• "I really wish I could say something ... about what's happened to compensation. But I have no useful insight to offer you ... It's — fortunately for me I think — something substantially outside the day-to-day preoccupation of my world," Geithner responding to a question about exorbitant executive pay at a panel discussing international economics at the Council on Foreign Relations in New York (Foreign Service, January 11, 2007)

See pictures of TIME's Wall Street covers.

See pictures of the stock market crash of 1929.