Wall Streeters Question Geithner's Role in Crisis

Treasury pick has been at the table all along

By Jason Farago, Newser Staff

Posted Nov 25, 2008 8:51 AM CST

(Newser) – Markets surged yesterday when Barack Obama announced that Timothy Geithner would become treasury secretary as part of an all-star economic team. But Wall Street actually harbors some skepticism about Geithner, writes Andrew Sorkin in the New York Times. As chair of the New York Fed, Geithner was the point man during the critical days when Lehman Brothers collapsed, which many on Wall Street say exacerbated the crisis.

"Geithner, in our view, deserves retirement, not promotion," says one risk analyst. That bitter assessment echoes the views of several who disdain the man charged with overseeing Bear Stearns, Merrill Lynch, and Citigroup, and who put together the botched bailout of AIG. As to the suggestion that Geithner wanted to save Lehman but was overruled by Hank Paulson, one banking executive at the NY Fed that weekend says, "If that’s true, he did a good job of hiding it."

[Images (3)]

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Federal Reserve Chairman Ben Bernanke, right, and Timothy Geithner, president of the New York Fed, during lunch at the Economic Club of New York Wednesday, Oct. 15, 2008. (AP Photo/Mark Lennihan)

President-elect Barack Obama, left, and Treasury Secretary-designate Timothy Geithner, right, leave a news conference in Chicago, Monday, Nov. 24, 2008, after the president-elect introduced his economic... (AP Photo/Pablo Martinez Monsivais)

Treasury Secretary-designate Timothy Geithner, during a new conference by President-elect Barack Obama, announcing members of Obama's economic team, Monday, Nov. 24, 2008, in Chicago. (AP Photo/Pablo Martinez Monsivais)

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We have only two things to say about Tim Geithner, who we do not know: AIG and Lehman Brothers.
- Christopher Whalen, head of Institutional Risk Analytics

He was in the room at every turn of the crisis. You can look at that both ways. - An executive who participated in several confidential meetings with Geithner

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Wall Streeters Question Geithner's Role in Crisis