Obama nominated technocrat Geithner as Treasury Chief

US - Timothy Geithner, who was Monday nominated president-elect Barack Obama’s Treasury chief, brings international experience, the insight of a Washington insider and markets technocrat to the key post at a time of acute, global economic peril.

“Tim will waste no time getting up to speed,” Obama said, naming Geithner “the chief economic spokesman for my administration” at a press conference on Monday.

The well-traveled president of the New York Federal Reserve has been at the sharp end of US authorities’ battle to shore up panicky financial markets by overseeing the central bank’s explosion of intervention in recent months.

The 47-year-old — who also serves as vice chairman of the policy-making Federal Open Market Committee — was a key player in negotiations which, just before midnight on Sunday, resulted in a US government rescue plan for ailing banking giant, Citigroup.

He played a lead role in the bailouts earlier this year of insurance giants AIG and Bear Stearns, and in the decision to let Lehman Brothers collapse.

But he is also an old Treasury hand, having risen up the ranks of US government from 1988 to 2001 to the peak of undersecretary for international affairs.

“For all the currency traders out there, this means he was in charge of US dollar policy and is steeped in the nuance of the currency markets,” Andrew Busch at BMO Capital Markets commented. “Unlike during rookies’ Paul O’Neill or John Snow’s tenures, we won’t get many mistakes to make easy money,” he said, referring to President George W. Bush’s first two Treasury secretaries.

If confirmed, Geithner would take over in January from Republican Henry Paulson and become the overseer of a 700-billion-dollar bailout package for distressed banks, which has failed to dim fears of a long and painful recession.

Well before the current crisis erupted in mid-September, Geithner warned that the US and global financial systems were “going through a very challenging period of adjustment.”

“The critical imperative today is to help facilitate that adjustment and to cushion its impact on the broader economy,” he told Congress, calling for “substantial reforms” to policy, regulation and oversight governing markets. “The forces that made the system vulnerable to this crisis took a long time to build up, and the system will need some time to work through their aftermath,” Geithner added, in one of his rare forays into the limelight.

On Bush’s arrival at the White House in January 2001, Geithner left the Treasury for the Council on Foreign Relations and also worked at the International Monetary Fund before joining the New York Fed in 2003.

Geithner, who is married with two children, echoes Obama in calling for a balance to be struck between innovation and stability when it comes to managing the unruly financial markets. “Our financial system has many strengths, and we need to examine ways to build on those while making the system more resilient to future shocks,” he said in his July testimony to a House of Representatives committee.

WASHINGTON, Tuesday, AFP