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Last June, with a financial hurricane gathering force, Treasury Secretary SIGN IN TO E-MAIL
Henry M. Paulson Jr. convened the nation’s economic stewards for a PRINT
brainstorming session. What emergency powers might the government want SINGLE PAGE
SHARE
Enlarge This Image Timothy F. Geithner, who as president of
the New York Federal Reserve Bank
oversaw many of the nation’s most
powerful financial institutions, stunned
the group with the audacity of his answer.
He proposed asking Congress to give the
president broad power to guarantee all the debt in the banking
system, according to two participants, including Michele Davis,
Librado Romero/The New York Times
Treasury Secretary Timothy F. then an assistant Treasury secretary.
Geithner in in his Manhattan office in
February 2007, when he was
president of the New York Federal The proposal quickly died amid protests that it was politically
Reserve Board.
untenable because it could put taxpayers on the hook for
trillions of dollars.
Multimedia
“People thought, ‘Wow, that’s kind of out there,’ ” said John C.
Dugan, the comptroller of the currency, who heard about the
idea afterward. Mr. Geithner says, “I don’t remember a serious
discussion on that proposal then.”
Share Observations on He was the federal regulator most willing to “push the
Geithner’s Calendar envelope,” said H. Rodgin Cohen, a prominent Wall Street
The Times is inviting readers to
lawyer who spoke frequently with Mr. Geithner.
comb through the calendars and
add remarks. Today, Mr. Geithner is Treasury secretary, and as he seeks to
rebuild the nation’s fractured financial system with more
taxpayer assistance and a regulatory overhaul, he finds himself a
locus of discontent.
The New York Fed is, by custom and design, clubby and opaque. It is charged with curbing
banks’ risky impulses, yet its president is selected by and reports to a board dominated by the
chief executives of some of those same banks. Traditionally, the New York Fed president’s
intelligence-gathering role has involved routine consultation with financiers, though Mr.
Geithner’s recent predecessors generally did not meet with them unless senior aides were also
present, according to the bank’s former general counsel.
By those standards, Mr. Geithner’s reliance on bankers, hedge fund managers and others to
assess the market’s health — and provide guidance once it faltered — stood out.
His calendars from 2007 and 2008 show that those interactions were a mix of the professional and
the private.
He ate lunch with senior executives from Citigroup, Goldman Sachs and Morgan Stanley at the
Four Seasons restaurant or in their corporate dining rooms. He attended casual dinners at the
homes of executives like Jamie Dimon, a member of the New York Fed board and the chief of
JPMorgan Chase.
Mr. Geithner was particularly close to executives of Citigroup, the largest bank under his
supervision. Robert E. Rubin, a senior Citi executive and a former Treasury secretary, was Mr.
Geithner’s mentor from his years in the Clinton administration, and the two kept in close touch in
New York.
Mr. Geithner met frequently with Sanford I. Weill, one of Citi’s largest individual shareholders
and its former chairman, serving on the board of a charity Mr. Weill led. As the bank was
entering a financial tailspin, Mr. Weill approached Mr. Geithner about taking over as Citi’s chief
executive.
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Past Coverage
Credit Markets Still Tight, Geithner Says (April 22, 2009)
TALKING BUSINESS; This Time, The Fix Makes Sense (March 28, 2009)
BREAKINGVIEWS.COM (March 25, 2009)
Rescue Plan, With Fine Print, Dazzles Wall St. (March 24, 2009)
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