Timothy Geithner today asked Congress for expanded power to take the helm of big, failing institutions like AIG and wind them down in an orderly fashion, Reuters reports. “AIG highlights broad failures of our financial system," Geithner said in unusually spirited testimony before the House Financial Services Committee. "We must ensure that our country never faces this situation again.” Geithner and Ben Bernanke were called before fire-breathing lawmakers to testify about AIG’s recent bonus payout.
The pair defended their moves during the AIG bailout. Bernanke said he’d wanted to sue to prevent the bonus payouts, but had been advised by lawyers not to. Geithner said that if they'd had the FDIC-like powers they're now proposing, things would have gone more smoothly, with federal agencies able to "impose haircuts on creditors and counterparties." Barney Frank at least seemed sympathetic, saying, "We need to give somebody, somewhere in the federal government the power" to put failing giants "out of their misery."
(Read more Timothy Geithner stories.)