Treasury Secretary Tim Geithner– having succeeded in forcing Paul Volker to the sidelines of Obama's ‘team of rivals’ and empowering himself and Larry Summers as the go-to guys on finance – has been touting a reform of regulatory Institutions – SEC, FDIC, OCC and CFTC.
This is part of his claimed plan to heighten regulation by "streamlining" the regulatory agencies under the control of a super-agency. The plan might have merit - so long as the regulation is not diluted. And that is where the biggest concern over Geithner and Summers continues to lie.
A look at an uninspiring history, and some new troubling signs over the fold
De-Fanging the CFTC
As many readers of kos already know, Obama's choice of those who opposed former CFTC chair Brooksley Borne is troubling.
Writing on the 'Profiles in Courage' Kennedy Awards recently given to Sheila Bair and Brooksley Borne, Investment Daily News reminded readers that
The head of the FDIC and former chief of the CFTC tried to avert and then reverse the economic crisis
Geithner colleague Larry Summers – who with other Clinton-era de-regulation proponents, our deservedly maligned former Fed Chairman, ad a deregulation obsessed Republican Congress – all conspired to strip Brooksley Borne of her power in trying to regulate credit default swaps at Commodities Cutures exchange {CFTC).
Even tho he talks the talkabout mergers, Geithner is not particularly strong in working against big agri business – who like the status quo just fine. The word from Bloomberh is that Geithner May Abandon SEC-CFTC Merger Resisted by [mostly Republican] U.S. Lawmakers
But where Geithner does remain strong is - his opposition to any forceful regulation and prudent review of banks by Shelia Bair at the FDIC
In the last few days, the Geithner-Summers duo has signaled capitulation to Vikram Pandit's opposition to a prudent and thorough review by the FDIC of a new stock swap.
Several Business newsgroups are headlining this in the same was as this:
Citigroup May Go Ahead With Stock Swap, Giving Bair The Stiff Arm
One research analyst at New York’s Graham Fisher & Co.
is cited in a Bloomberg article is crediting Sheila Bair as
"the only prudential regulator in Washington who has any understanding of the need to force the disgorgement of troubled assets from troubled institutions. And you cannot have a healthy banking institution without doing that."
Well, I say to myself, maybe Geithner knows more about this than Bair does
Then I read the newest acknowledgment of economists about the jobs numbers on which Geithner based his "Stress Test" for bank solvency - apparently our current unemployment figures are already higher than the hypothetical rate that Geitner used to calculate the health of banks and other financial institutions in so-called "stress tests" earlier this year.
Here's an articleon the jobs figures
Cause for concern? Yes, in my book. Gotta go to work so may not be doing much posting in comments, but hoped for some brilliant econ and math minds to contribute to the conversation here, as I amt worried about these new signs that Geithner is not at the top of this game.