Geithner is viewed as top player
By Aline van Duyn and Henny Sender in New York
Published: November 22 2008 00:45 | Last updated: November 22 2008 00:45
Tim Geithner, Barack Obama’s choice to become the new US Treasury secretary, has been at the centre of efforts to fight the financial and economic storm engulfing the world.
The New York native took over as president of the Federal Reserve Bank of New York five years ago.
As the regulator with the closest connections to Wall Street, he has played a leading role in efforts to tackle the financial eruptions that rocked Bear Stearns in March and Lehman Brothers and AIG in September.
The inability of officials, including Mr Geithner, to prevent the bankruptcy of Lehman Brothers, followed by the government takeover of the AIG, the insurer, days later, generated controversy, especially in light of the meltdown of financial markets across the world after the bank’s collapse.
Born only weeks after president-elect Obama, and now 47 years old, Mr Geithner began his government career at the Treasury in 1988. He worked there under one of his main rivals for the position of Treasury secretary, Lawrence Summers. Unlike many of the world’s leading economic officials, Mr Geithner does not have an academic background in economics or finance.
Unusually among senior US officials, Mr Geithner has extensive international experience. He spent much of his childhood in Asia and Africa. As the Treasury attaché in Tokyo in the mid-1990s, Mr Geithner witnessed first hand Japan’s “Lost Decade” of economic woes and the price to be paid for not acting swiftly enough to prick a bubble in asset markets.
He joined Mr Summers’s international team under Robert Rubin, Treasury secretary. Mr Geithner rose rapidly, playing a big part in shaping the US response to the Asian financial crisis.
“He is very bright, independently minded, thoughtful, and has an unusual sense of public service – he is a very easy person to get along with,” Mr Rubin told the Financial Times this year.
“He is practical, worldly in the sense that he has a feel for things – for the psychology of markets, the politics of what he is doing – and a good sense of humour.”
In speeches going as far back as 2004, Mr Geithner praised innovations in finance such as securitisation and globalisation. But at the same time he warned that these developments, while reducing the probability of a crisis, could exaggerate the downside if one ever did occur.
Surprisingly little is known about Mr Geithner’s private life but he is a keen tennis player and an enthusiastic skier who recently took up snowboarding. He married young to Carole Sonnenfeld, a college sweetheart, and has two children.
Within the Fed, Mr Geithner has a reputation as a fiercely competitive sportsman.
He joined the Legal Department’s basketball team, where he played in defence. “He was the best player on the team,” said one former Fed executive.