Timothy Geithner offers mixed review of the economy, then targeted by GOP
“The economy is not growing fast enough. Unemployment is very high. There’s a huge amount of damage left in the housing market. Americans are living with the scars of this crisis.” – Secretary of Treasury Tim Geithner said about the economy in his testimony to Congress on Thursday.
Treasury Secretary Timothy Geithner Official White House Photo by Pete Souza
Geithner warned Congress on Wednesday that the debt crisis in Europe and a looming budget crisis in Washington could weaken an already-fragile U.S. economy.
Geithner also tells a House panel that regulators must pursue stricter oversight of the financial system to help stabilize the economy.
“The institutions with authority should be doing everything they can to try to make economic growth stronger,” Geithner said. “That is an obligation we all share. Congress under the Constitution has the authority for the most powerful tools we have available to help economic growth. We’d like Congress to use those tools now in this context. And again we will keep supporting anything practical, sensible, that will make growth stronger, help get more people back to work, help make credit more available to more people not just to buy a home or to refinance a mortgage, but to make sure businesses can expand to meet growing demand for their products.”
Republican lawmakers are criticizing Geithner for failing to alert Congress four years ago that banks could have been manipulating a key global interest rate. He defended his actions at a hearing Wednesday of the House Financial Services Committee.
“I felt that we did the important and fully appropriate thing,” Geithner testified.
The manipulation of the London interbank offered rate by global banks has now emerged as a full-blown scandal and further evidence that these banks have become a rogue industry. It has also raised new questions about Geithner’s record as head of the New York Federal Reserve Bank, the job he held in 2008 at the onset of the financial crisis.
Geithner defended his reluctance to report possible fraud by British banks in setting of Libor in a pair of congressional hearings this week. He said his action to recommend structural reforms in Libor was the appropriate response in the midst of the crisis and other actions were the responsibility of British regulators.
Documents show the New York Fed learned in 2007 that Barclays was manipulating the rate.
Other major banks, including Citigroup Inc. and JPMorgan Chase & Co., are under investigation for similar violations.
The European Union proposed Wednesday to make manipulating the Libor and other key global interest rates a crime.
