Geithner touted for top post at Treasury
On an Obama economic brain trust studded with high-profile heavyweights, Timothy F. Geithner, the low-key president of the Federal Reserve Bank of New York, has emerged as a top candidate to head the Treasury Department or another top policy post in the new administration.
Mr. Geithner, 47, is two weeks younger than the president-elect but has served in top Treasury and Federal Reserve positions since the late 1980s. He joined Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke to oversee the Bush administration’s effort to contain the crises in the world’s credit and financial markets.
Mr. Obama and Vice President-elect Joseph R. Biden Jr. will hold their first press conference since the election Friday in Chicago after a meeting with the transition economic advisory board. Mr. Geithner is not listed as a member of the transition team.
The New York Fed is considered the most influential of the regional Federal Reserve Banks. By virtue of his position, Mr. Geithner serves as vice chairman of the central bank’s Federal Open Market Committee, the key body guiding monetary policy.
Like Mr. Obama, Mr. Geithner is described by colleagues as even-tempered and wonkish at times, comfortable debating abstract financial concepts and not likely to break the bureaucratic crockery as an administrator.
With the economy declining, plunging financial confidence and a $700 billion Wall Street rescue program just getting under way, the Treasury secretary selection will be one of the most critical for the new president, and one of the most closely scrutinized.
Mr. Obama’s economic advisory team during the campaign contained an unusually large number of heavy hitters, including former Federal Reserve Chairman Paul A. Volcker, billionaire investor Warren Buffett, and two Clinton administration Treasury secretaries — Robert E. Rubin and Lawrence H. Summers.
Mr. Rubin, who had been rumored to receive a top post in the new administration, told Bloomberg News on Thursday that he was not interested in returning to government.
It was Mr. Summers who boosted Mr. Geithner’s career at several points after he joined the Treasury Department’s international affairs division as a civil servant in 1988. He became a top aide to Mr. Summers and was named Treasury undersecretary for international affairs in 1999, a post previously reserved for political appointees.
Mr. Geithner left the department in 2001 and spent time as a fellow at the Council on Foreign Relations and at the International Monetary Fund before joining the New York Fed in October 2003. Unusual for a top Fed official, he had no private banking experience and his graduate degree was in international studies, not finance.
He was one of the first regulators to focus on the risks from credit derivatives market, which was designed to protect investors from the risk of default on bonds, loans and public and private securities. The explosion of “credit default swaps” led to crippling uncertainties in the world’s financial markets following the implosion of the market for mortgage-based assets.
Mr. Geithner’s supporters say he is well-versed in the complex economic issues the new administration will face, already having been deeply involved in dealing with the crises at investment bank Bear Stearns and insurance giant American International Group that helped spark the Wall Street panic.
His lack of Wall Street background also may prove a point in his favor, given the popular backlash against the financial industry.
Mr. Geithner is said to lack a close personal relationship with Mr. Obama, although he helped brief the candidate about the government’s efforts to deal with the credit crisis this year.