Magazine article American Banker

Geithner: No Single Systemic-Risk Cop

Magazine article American Banker

Geithner: No Single Systemic-Risk Cop

Article excerpt

Byline: Stacy Kaper

WASHINGTON - Treasury Secretary Timothy Geithner said Tuesday that the Obama administration will not propose empowering the Federal Reserve Board to take sole responsibility for handling systemic risk, saying that the job is too complex for just one agency.

In his comments to a Senate panel, Geithner hinted that he would support a regulatory council - an idea suggested by Federal Deposit Insurance Corp. Chairman Sheila Bair in April.

"I think a council has a lot of merits in that context, and I don't believe that it's necessarily desirable for us to concentrate all authority for dealing with future risks to the system in one part of our complicated governmental structure," Geithner told the Senate Appropriations financial services subcommittee. "We are not going to propose to concentrate all authority for systemic issues in only one place - it's too complicated, really, to do that."

Geithner also said the administration's regulatory revamping plan, which is expected to be announced by President Obama next week, would not include a blueprint for restructuring Fannie Mae and Freddie Mac.

Instead, he said the administration plans to go over its options with Congress but put off deciding on the government-sponsored enterprises' future.

"The future of GSEs, including Fannie and Freddie, is an important challenge for us, but ... we are not going to recommend in our initial proposal precisely what we think the future of them should be," he said. …

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