The chatter in Washington and on Wall Street is that White House Chief of Staff Jack Lew is the favorite to replace Treasury Secretary Timothy Geithner in President Obama's second term. The decision could disappoint critics hoping for a dramatic change in the administration's approach to banks.

Throughout Obama's first term, Geithner has been constantly criticized as looking out for the interests of Wall Street over Main Street, particularly for what some critics say was his opposition to mortgage relief for underwater homeowners out of concern for bank profits. Lew seems likely to be less of a lightning rod than Geithner, who is the protege of bank-deregulator Robert Rubin. Lew is widely seen as a smart, tough negotiator and an able public servant.

But his professed lack of expertise in financial regulation, along with his own tenure at Rubin's old firm, the original too-big-to-fail bank, Citigroup, has raised warning flags among critics. They fear a Lew Treasury might not aggressively push back financial industry efforts to water down the Dodd-Frank financial-reform law or keep an eye out for the next financial crisis.

"He is very bright and has the capacity to be an honest broker," said University of Maryland law professor Michael Greenberger. "But I think it would be better to have more than an honest broker. [We need] someone intimately familiar with what went wrong in 2008 and what's gone wrong since then. Those are, for the American economy, life-or-death issues."

Lew, who previously ran Obama's Office of Management and Budget, is known in Washington as a top-notch negotiator who understands federal spending like few others and who can make difficult decisions in order to cut a bipartisan deal. Lew's reputation was forged in the Clinton administration, where he played a pivotal role in the negotiations that resulted in Clinton's historic 1997 Balanced Budget Act.

To Beltway insiders, Lew's appointment as Treasury Secretary would be taken as a sign that Obama intends to prioritize budget and tax policy negotiations in his second term, in spite of a fiercely divided Congress.

"Jack has experience negotiating balanced budgets with a Republican Congress, and he'd bring that to bear on anything he worked on," said Michael Barr, a former assistant secretary of the Treasury for Financial Institutions under Obama who worked with Lew in the Clinton administration.

One potential upside of a politically neutral pick, like Lew, for the top job at the Treasury is that it could provide some cover, politically speaking, for the appointment of more progressive candidates to lead specific agencies reporting to Lew. If this were the case, potential beneficiaries include Gary Gensler, chairman of the Commodities Futures Trading Commission and a strong proponent of derivative trading regulation, and former FDIC chairwoman Sheila Bair, whose recent book, "Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself" leaves little doubt as to where she stands on financial industry regulations.

Lew is also generally seen as somewhat more palatable to critics on the left than some other candidates, such as deficit hawk Erskine Bowles and BlackRock CEO Larry Fink.

Lew does have some experience in the banking sector: a brief stint at Citigroup, ending in late 2008, as chief operating officer of two now-defunct units at the bank, Citi Global Wealth Management and Citi Alternative Investments. The Huffington Post reported in 2010 that CAI, which included Citi's proprietary-trading desk, hedge funds and private equity, made money on the housing collapse, betting against subprime mortgages.

There is no crime in that, and Lew's role at both Citi units was running the back office -- not managing investments. But Lew's time at Citigroup, particularly serving the very proprietary trading -- betting with the bank's own money -- that the Volcker Rule of Dodd-Frank seeks to prohibit, also has reform advocates worried where Lew's loyalties will lie.

"The Treasury Secretary should be somebody whose feet are firmly planted on Main Street," said Bartlett Naylor, a financial policy advocate at Public Citizen, a nonprofit reform advocacy group. "Lew's feet are much closer to Wall Street."

In a recent National Journal profile of Lew, an anonymous financial industry "leader" said banks would be just fine with Lew.

"He’s not viewed as hostile to the business community, like most policymakers are,” the banker told the National Journal. “From an industry standpoint, we could do a heck of a lot worse.”

At the same time, Lew has also suggested that he has not thought deeply about matters of financial regulation. During his Senate confirmation hearing for his OMB chairmanship in 2010, Bernie Sanders (I-Vt.) asked Lew if he thought the deregulation of Wall Street had contributed to the financial crisis. Lew's answer was disturbing to some reformers.

"Senator, I don't consider myself an expert in some of these aspects of the financial industry," Lew replied. "My experience in the financial industry has been as a manager, not as an investment adviser.

Lew went on to say that he didn't think Wall Street's problems had all that much to do with deregulation, including the removal of barriers to creating too-big-to-fail banks such as Citigroup. Instead, Lew said he thought the financial crisis was due mainly to derivatives and too much leverage.

"I don't believe that deregulation was the proximate cause," he said, adding, "I would defer to others who are more expert about the industry to try and parse it better than that."

To some, these are not the sorts of answers you'd like to hear from the man who, as Treasury Secretary, would sit at the helm of the Financial Stability Oversight Council, charged with keeping an eye out for risks in the financial system.

"Somebody who can't answer that question, to me that sends up red flags," said Greenberger of the University of Maryland. "I think too little importance is being placed on having a steady hand to ensure the economy does not sink into a systemic risk problem."

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  • Gary Gensler

    Before starting his career in public service, Commodity Futures Trading Commission chairman Gary Gensler spent <a href="" target="_hplink">18 years working at Goldman Sachs</a>. Gensler's work at Goldman has gotten him into some hot water as the top futures industry regulator. After MF Global imploded into bankruptcy on his watch, losing millions in customer funds, Gensler recused himself from the probe, citing his history at Goldman with Jon Corzine, MF Global's ex-CEO. <a href="" target="_hplink">Senators blasted Gensler</a> and accused him of trying to "avoid the heat."

  • Henry Paulson

    Before serving as secretary of the Treasury under George W. Bush, Henry Paulson <a href="" target="_hplink">spent 22 years at Goldman Sachs</a>, eventually assuming the position of CEO. Paulson's ties to Goldman followed him to his new job: On multiple occasions in 2008, Paulson met with Goldman executives in informal contexts and <a href="" target="_hplink">shared his opinions about the future direction of the economy</a>. On one occasion, Paulson reportedly <a href="" target="_hplink">explained to at least a dozen Wall Street higher-ups</a> that the government was considering a takeover of Fannie Mae and Freddie Mac, some two months before it actually came to pass -- thus giving everyone in attendance a chance to trade profitably on that knowledge before it became public. <em>-- Alexander Eichler</em>

  • Timothy Geithner

    U.S. Treasury Secretary Timothy Geithner never worked on Wall Street, but given his close relationship with the financial industry it's not surprising many thank he has. Before assuming his post as Treasury Secretary, <a href="" target="_hplink">Geithner was president</a> of the Federal Reserve Bank of New York, a <a href="" target="_hplink">Wall Street regulator that's been heavily criticized</a> for its cozy relationship with the industry. In 2008, during his time as New York Fed president, Geithner became aware that banks were rigging the Libor benchmark rate and recommended that London regulators address the issue, but most of Geithner's suggestions came <a href="" target="_hplink">essentially verbatim from banks</a>. Now <a href="" target="_hplink">more than 15 banks</a> are under investigation for rate-rigging and some critics are arguing that Libor rigging is one of the biggest financial scandals of our time.

  • Jack Lew

    Jack Lew, whom <a href="" target="_hplink">President Obama named as his new chief of staff</a> early this year, worked at Citigroup between 2006 and 2009. While there, he served as the chief operating officer of Citi's Alternative Investments unit, a division that oversaw the same kind of proprietary trading activity that the so-called Volcker Rule would later <a href="" target="_hplink">attempt to curtail</a>. At one point, Lew's unit invested millions in a fund run by hedge fund manager John Paulson, who made his fortune <a href="" target="_hplink">speculating on the collapse of the housing market</a>. Later, during his confirmation hearing to lead the Cabinet-level Office of Management and Budget, Lew told a Senate panel that he <a href="" target="_hplink">didn't "believe that deregulation was the proximate cause"</a> of the financial crisis. <em>-- Alexander Eichler</em>

  • Bill Daley

    Bill Daley, Obama's outgoing chief of staff, came to JPMorgan Chase in 2004 to serve as <a href=" Co." target="_hplink">Chairman of the Midwest Region</a>. Daley held that position until January 2011, when he departed for the White House. During Daley's time at JPMorgan Chase, the bank accepted <a href="" target="_hplink">a $25 billion government bailout</a> and laid off <a href="" target="_hplink">more than 9,000 workers in a three-year period</a>. The company has since regained its strength, reporting <a href="" target="_hplink">$2.29 trillion in assets</a> as of late 2011, when it overtook Bank of America to become the nation's largest bank. In 2010, Daley's total earnings at JPMorgan came to <a href="" target="_hplink">$8.7 million</a>. <em>-- Alexander Eichler</em>

  • Mark Patterson

    Mark Patterson, <a href="" target="_hplink">chief of staff to Treasury Secretary Timothy Geithner</a> since 2009, has been moving between politics and finance for the past decade. In 2004 he left a staff position as policy director for Senator Tom Daschle to become a vice president at Goldman Sachs. (Patterson's move to Goldman came a year after <a href="" target="_hplink">he got married to Jennifer Leete</a>, an attorney in the enforcement division of the Securities and Exchange Commission.) While Patterson was at Goldman, his responsibilities included lobbying the federal government, and in 2007 he was part of a group of lobbyists believed to have opposed legislation sponsored by Representative Barney Frank and then-Senator Barack Obama to <a href="" target="_hplink">curb executive compensation on Wall Street</a>. <em>-- Alexander Eichler</em>

  • Peter Orszag

    Peter Orszag, who served as director of the Congressional Budget Office from 2007 to 2008 and director of the Office of Management and Budget for nearly two years after that, left the Obama administration in July 2010. In December of that year, Orszag took <a href="" target="_hplink">an executive position at Citigroup</a>, where he's now the <a href="" target="_hplink">vice chairman for global banking</a> and a member of the company's Senior Strategic Advisory Group. In 2008, the U.S. government bailed out Citigroup with a $45 billion rescue package. At the time that Orszag's move to Citigroup was announced, loan interest and stock sale proceeds had converted that bailout into <a href="" target="_hplink">a $12 billion profit for the government</a>. -- Alexander Eichler

  • Rahm Emanuel

    Before Rahm Emanuel was mayor of Chicago or chief of staff in the Obama White House, he spent time as a managing director with the investment bank Wasserstein Perella, where he made <a href="" target="_hplink">a reported $18 million</a> in less than three years. Once he resumed his career in politics, Emanuel's ties with the business community remained strong. In 2006, when Emanuel, then a member of the House of Representatives, was chairing the Democratic Congressional Campaign Committee, sources in the financial industry contributed <a href="" target="_hplink">more than $5.8 million</a> to the group's midterm election efforts. And in 2008, Emanuel was <a href="" target="_hplink">the number-one House recipient</a> of donations from the hedge funds, private equity firms and the securities and investment industry. <em>-- Alexander Eichler</em>

  • Robert Steel

    Robert Steel had a long life with Goldman Sachs before serving as the under secretary of the Treasury for domestic finance under George W. Bush. Steel <a href="" target="_hplink">came to Goldman in 1976</a> and rose to the position of vice chairman before <a href="" target="_hplink">leaving in 2004</a>. As under secretary of domestic finance, Steel worked closely with then-Treasury secretary and fellow Goldman alum Henry Paulson, and <a href="" target="_hplink">acted as a frequent liaison</a> between the Treasury and the House Financial Services Committee. After leaving his Treasury post, Steel returned to finance -- serving as CEO of Wachovia, and <a href="" target="_hplink">brokering its sale to Wells Fargo in 2008</a> -- before circling back once more to public service, with a post as <a href="" target="_hplink">New York City's deputy mayor for economic development</a> under Mayor Michael Bloomberg. <em>-- Alexander Eichler</em>

  • Robert Rubin

    Robert Rubin, secretary of the Treasury under President Clinton from 1995 to 1999, spent time in the financial industry both before and after his political career. Rubin was at Goldman Sachs for <a href="" target="_hplink">some 26 years</a>, <a href="" target="_hplink">rising to the position of co-chairman</a> before joining the Clinton administration as an assistant to the president for economic policy. Following his tenure as Treasury Secretary, Rubin was on the board of directors at Citigroup from 1999 to 2009, during which time the bank <a href="" target="_hplink">greatly increased its risk profile</a> and ultimately had to accept a $45 billion government bailout. Rubin has been criticized for <a href="" target="_hplink">not doing more to regulate the derivatives market</a>, especially the trading of credit-default swaps -- the instruments that would ultimately play a large fole in triggering the financial crisis. <em>-- Alexander Eichler</em>