Tim Geithner: Tough Financial Regulation Benefits Well-Managed Firms

WASHINGTON (AP) — Treasury Secretary Timothy Geithner is urging top bankers to accept tough new financial regulations passed in response to the 2008 financial crisis, instead of pressuring Congress to weaken them.

Speaking at a banking conference, Geithner criticized banking executives who are supporting Republican efforts to block resources needed to implement the law. The measure was passed last year when Democrats controlled both chambers of Congress.

Geithner says the strongest and best managed firms have the most to lose if the regulations are weakened. That's because their competitors would benefit the most from loopholes and hurt the entire financial system.

Geithner says the top U.S. financial institutions "should be champions, not opponents of getting strong capable people to lead and staff the oversight bodies."

Comments

[Linda from Deerfield]

11:07 AM on 06/08/2011

Sound regulations and enforcement are protective of the participants. It seems obvious to me. My favorite example is the recent near destruction of the peanut industry. A major peanut processor operated a Texas plant without any of the usual state licensing and oversight, which led to federal inspectors having no knowledge of the plant's existence. It's hard to believe the state was actually blind rather than being complicit, but that was their claim. Free of regulation, the plant fell into a filthy state. After salmonella caused deaths and illness at several hospitals, nursing homes and schools (!), the plant was shut down and the owner was convicted of crimes.

In the meantime, as the whole story began to unfold, major peanut users were forced to convince the public that their peanut sources were safe and/or to instigate recalls. The public soon lost patience with trying to it all sort out and simply stopped buying almost everything containing peanuts. The business of the "good" peanut processors tanked, and peanut farmers lost their markets and were forced out of business through no fault of their own.

The "good" processors suffered from having to compete with a source that short cut health and safety measures. The public does not have the tools or the time to separate the good from the bad so they will avoid both if they possibly can. Unless we want market participants to match the most sleazy and dangerous and abusive player, we need regulation and rigorous enforcement.

[goatboy72]

12:10 PM on 06/08/2011

Libertarianism in a nutshell.

[Jack Daniels Esq]

05:48 AM on 06/08/2011

Watch him flip-flop into the next faux pas - Madoff was not a Ponzi - just an American dream

[rigslip]

12:28 AM on 06/08/2011

This coming from a man that failed to manage his own taxes. What an idiot.

[Cipo]

11:26 PM on 06/07/2011

Why does anyone listen to what this sanctimonious toad has to say?

[Under Fed yet Fed Up]

10:30 PM on 06/07/2011

Yeah, sure. Like Cap and Trade maybe? That would be a real job creator!

[rnl52]

08:04 PM on 06/07/2011

Yeah, Tim....if only we had tough regulations, you know, like Glass-Steagelman.

[Raccoon1]

07:32 PM on 06/07/2011

Regulations can help businesses. There's a huge dairy not too far from where I live. The owner says that the regulations they face are good for all dairymen. Just let one case of illness break out as a result of ONE dairyman cutting corners and they all suffer losses of sales, and dairy products won't keep until things 'blow over' - losses would be heavy. I imagine there are other industries that are similar.

[ThePeacemakers]

06:28 PM on 06/07/2011

Right now, he's just talking to a bunch of people trying to:
1) Stay out of jail
2) Stay out of jail
3) Stay out of jail

[1oldhippie]

06:17 PM on 06/07/2011

Perhaps, the point he's trying to make is that, businesses that 'play by the rules' are less likely to be faced with lawsuits and litigation. This way, instead of saddling the shareholders, with bad debt-the company and the economy would improve!

[bg66astoria]

04:23 PM on 06/07/2011

So why didn't he back real reform from 21 Jan 2009? - Because of the friends he helped when he was @ the NY FED!

He didn't do his job @ the NY Fed & he continued to work against US when he got to DC!

[Jack Daniels Esq]

12:31 PM on 06/07/2011

I trust Geithner is not referring to the Fed as being 'well-managed' - cause it aint

[tosc]

10:09 AM on 06/07/2011

oh good ole gi, gi, geithner......he talks out of both of his nostrils....washington is so full of themselves..but they are all sliding on the slippery slope they created....when you are at the top there is only one way to go...

[Jack Daniels Esq]

12:33 PM on 06/07/2011

Wadda ya want from Motormouth II - exit stage left - the teleprompter

[Saxton]

09:49 AM on 06/07/2011

Geithner and Bernanke are both crooks that literally made it possible for the banks to bring this country to its' knees and the banks will not stop until they have destroyed this nation. Geithner was the key individual who orchestrated the bank bail outs and created "too big to fail", whereby the banks will never be held accountable and will always get bailed out by the US tax payer. The fact that Obama allowed himself to be manipulated by this cheat, tells me that this country will be hobbled from ever getting out of this recession.

[NYCBri]

01:59 PM on 06/07/2011

Actually Greenspan is far more to blame than Bernanke. And Paulson (Bush treasury Secretary) is far more to blame than Geithner.

[bg66astoria]

04:25 PM on 06/07/2011

True, Paulson & Greenspan have more blame - but Geithner did nothing at the FED or Treasury to either enforce standing laws or to enact real reform - like Glass-Steagall 2.

[Renlim]

09:47 AM on 06/07/2011

I find it interesting that the timing of Fed.. Ben Bernanke's Speech on 06/07/11..is when the market is on the verge of lowering below the 12000 mark and after the markets closes.

[Jack Daniels Esq]

08:38 AM on 06/07/2011

His A-Team appear to have skipped the ghetto part - maybe