Make us your home page

Geithner warns against financial crisis 'amnesia'

WASHINGTON— As the fourth anniversary of the first government bailout of the financial crisis approached, Treasury Secretary Timothy F. Geithner on Friday decried financial crisis "amnesia" by opponents of the sweeping regulatory overhaul enacted to prevent a repeat.

"We cannot afford to forget the lessons of the crisis and the damage it caused to millions of Americans," Geithner wrote in an opinion article in the Wall Street Journal. "Amnesia is what causes financial crises. These reforms are worth fighting to preserve."

Geithner offered a vigorous and personal defense of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which has been sharply criticized by the financial industry and Republicans as a severe regulatory overreaction that is hindering the economic recovery.

"My wife occasionally looks up from the newspaper with bewilderment while reading another story about people in the financial world or their lobbyists complaining about Wall Street reform or claiming they didn't need the Troubled Asset Relief Program," Geithner wrote. "She reminds me of the panicked calls she answered for me at home late at night or early in the morning in 2008 from the then-giants of our financial system."

He specifically talked of the call one night in early March 2008 from Alan Schwartz, chief executive of Bear Stearns, saying the investment bank planned to file for bankruptcy. Geithner was head of the Federal Reserve Bank of New York at the time.

Fearing a financial meltdown if Bear Stearns collapsed, the Fed provided $30 billion in emergency money to help JPMorgan Chase buy its former rival. The action began a series of extraordinary measures by the Fed in 2008 and 2009, including the creation of the $700 billion TARP bailout fund, to address the crisis.

Geithner argued that amnesia led to years of excessive risk-taking by Wall Street and a failure by regulators to have tools in place to deal with problems when they arose.

"There was no memory of extreme crisis, no memory of what can happen when a nation allows huge amounts of risk to build up outside of the safeguards all economies require," Geithner said. "The financial safeguards in the law at that moment were tragically antiquated and weak.

"Remember the crisis when you hear complaints about financial reform — complaints about limits on risk-taking or requirements for transparency and disclosure," he said. "Remember the crisis when you read about the hundreds of millions of dollars now being spent on lobbyists trying to weaken or repeal financial reform."

Geithner warns against financial crisis 'amnesia' 03/02/12 [Last modified: Friday, March 2, 2012 10:58pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.

Join the discussion: Click to view comments, add yours

  1. Trigaux: Tampa Bay household income tops $50,000 but still makes us look poor

    Personal Finance

    The good news is Tampa Bay's median household income finally crawled above $50,000 last year. The bad news is that figure — officially $51,115 by new U.S. Census Bureau data — still puts the Tampa Bay region as the poorest of the nation's 25 largest metro areas.

    Tampa Bay still has the lowest median household income among the 25 most populous metro areas, according to U.S. Census Bureau data.
  2. Make-A-Wish Foundation aims to help more kids in Tampa Bay


    The Make-A-Wish Foundation is on the lookout for sick children in the Tampa Bay area who need a once-in-a-lifetime pick-me-up.

    Grace Savage, a 10-year-old girl with a chromosomal disorder made a trek to the Clearwater Marine Aquarium last year, courtesy of the Make-A-Wish Foundation. The foundation intends to beef up its presence in the Tampa Bay area after a reorganization. The region is now the responsibility of the foundation's Southern Florida chapter, one of the most active in the country, with more than 11,000 wishes granted so far. [JIM DAMASKE   |   Times ]
  3. Florida hides details in nursing home reports. Federal agencies don't.


    TALLAHASSEE — Gov. Rick Scott widened his offensive Thursday against the Broward nursing home he blames for the deaths of 10 residents by setting up a tip line for information, but when it comes to access to the inspection reports of all nursing homes, the governor's administration has heavily censored what the …

    In the foreground is a document detailing the findings of a Feb. 2016 inspection at the Rehabilitation Center at Hollywood Hills obtained from a federal agency, the Center for Medicare and Medicaid Services. Behind it is the state?€™s version of the same document, from the Agency for Health Care Administration, showing how it has been redacted before being released to the public. [Miami Herald]
  4. 'Toxic' times: How repeal of Florida's tax on services reverberates, 30 years later

    State Roundup

    TALLAHASSEE — Long before Hurricane Irma attacked Florida, the state faced a troubled fiscal future that the storm will only make worse.

    Robertson says the tax debate is now “toxic.”
  5. Fewer Tampa Bay homeowners are underwater on their mortgages

    Real Estate

    The percentage of Tampa Bay homeowners underwater on their mortgages continues to drop. In the second quarter of this year, 10.2 percent of borrowers had negative equity compared to nearly 15 percent in the same period a year ago, CoreLogic reported Thursday. Nationally, 5.4 percent of all mortgaged homes were …

    The percentage of Tampa Bay homeowners underwater on their mortgages  continues to drop. [Times file photo]