Timothy Geithner

Timothy Geithner
Timothy Geithner
Born	August 18, 1961 (age 65); Manhattan, New York, U.S.
Occupation(s)	Economist, central banker
Years active	1985–present
Known for	75th United States Secretary of the Treasury; President of the Federal Reserve Bank of New York; leadership during 2008 financial crisis

Timothy Franz Geithner (; born August 18, 1961) is a former American central banker who held the position of the 75th United States secretary of the treasury during President Barack Obama's administration from 2009 until 2013. Prior to this role, he served as President of the Federal Reserve Bank of New York between 2003 and 2009, following his tenure in the Clinton administration. Since March 2014, Geithner has been serving as president and chairman of Warburg Pincus, a private equity firm headquartered in New York City.

During his terms as New York Fed President and Treasury Secretary, Geithner was instrumental in governmental initiatives aimed at addressing the aftermath of the 2008 financial crisis and the subsequent Great Recession. His leadership at the New York Fed involved managing critical situations related to institutions such as Bear Stearns, Lehman Brothers, and American International Group. As Treasury Secretary, he was responsible for overseeing the deployment of $350 billion under the Troubled Asset Relief Program, which was established under the previous administration in response to the subprime mortgage crisis. Additionally, Geithner spearheaded efforts to overhaul financial regulatory frameworks, encouraged recovery within the mortgage sector and automobile industry, tackled issues concerning protectionism, pursued reforms in taxation, and engaged with international governments on matters of global finance.

Early life

Born in Manhattan, New York, Geithner is the son of Peter Franz Geithner and Deborah Moore. His father, a German American, led the Ford Foundation's Asia initiative during the 1990s after working with USAID programs in Zambia and Zimbabwe. In the early 1980s, he managed microfinance projects in Indonesia developed by Ann Dunham Soetoro—Barack Obama's mother—with whom he connected while in Jakarta. Geithner’s paternal grandfather emigrated from Zeulenroda, Germany to the United States.

On his mother's side, Geithner descends from a Mayflower lineage rooted in New England. His mother was the daughter of Charles Frederick Moore, Jr., who held the position of vice-president for public relations at Ford Motor Company and served as a political advisor to figures such as Eisenhower, Rockefeller, and Romney. His uncle Jonathan Moore held roles across multiple U.S. government departments including Defense, Justice, State, and also worked within the United Nations.

Geithner’s upbringing involved extensive time abroad across Zimbabwe, Zambia, India, and Thailand. He completed his secondary education at the International School Bangkok. He studied Mandarin Chinese at Peking University in 1981 and Beijing Normal University in 1982. Continuing his family’s academic tradition, he attended Dartmouth College where he earned an A.B. degree in Government and Asian studies in 1983. Subsequently, he acquired an M.A. in international economics and East Asian studies from Johns Hopkins University's School of Advanced International Studies in 1985. He has also pursued studies in Japanese.

Early career

Between 1985 and 1988, Geithner was employed at Kissinger Associates in Washington, D.C., before transitioning to the International Affairs division within the U.S. Treasury Department. He served as an attaché at the Embassy of the United States in Tokyo and subsequently advanced through various positions including deputy assistant secretary for international monetary and financial policy (1995–1996), senior deputy assistant secretary for international affairs (1996–1997), and assistant secretary for international affairs (1997–1998). From 1998 to 2001, he held the role of Under Secretary of the Treasury for International Affairs under Secretaries Robert Rubin and Lawrence Summers, both of whom were influential mentors. During this period, he played a significant part in managing financial crises affecting Brazil, Mexico, Indonesia, South Korea, and Thailand.

In 2001, Geithner departed from the Treasury to become a Senior Fellow in International Economics at the Council on Foreign Relations. He then took on the position of director of the Policy Development and Review Department at the International Monetary Fund from 2001 until 2003.

Federal Reserve Bank of New York

Geithner was named president of the Federal Reserve Bank of New York in October 2003, where he also served as Vice Chairman of the Federal Open Market Committee. In 2006, he became a member of the Washington-based financial advisory organization known as the Group of Thirty.

By 2005, Geithner had expressed reservations regarding Wall Street’s trading activities in financial derivatives, which later contributed to the 2008 financial crisis, although he did not actively pursue substantial regulatory reforms. In 2004, he encouraged banks to "build a sufficient cushion against adversity," yet by 2007 he supported the Basel II framework despite concerns that it might lower required capital reserves. That same year, he recognized that financial innovation enhanced risk management but cautioned that it could not fully eradicate systemic threats.

During his tenure as New York Fed president, Geithner was instrumental in orchestrating the U.S. government’s response to the 2008 financial turmoil. In March 2008, working alongside Treasury Secretary Henry Paulson, he facilitated the rescue and subsequent fire sale of Bear Stearns to JPMorgan Chase at $2 per share (later increased to $10), with Federal Reserve financing up to $30 billion for Bear Stearns’s illiquid assets. The New York Fed took on considerable risk by permitting Bear Stearns to appraise these assets and established Maiden Lane LLC to manage them through contracts with BlackRock, aiming for liquidation within ten years. Geithner defended this intervention before the Senate, underscoring its critical role in averting broader financial instability.

As difficulties at Lehman Brothers escalated during late summer 2008—with massive layoffs and plummeting stock values—Geithner gathered Wall Street leaders and regulators to explore solutions within the industry. He made it clear that government assistance for Lehman was unlikely but warned about potential contagion effects. When Bank of America withdrew from acquiring Lehman due to governmental hesitation over absorbing risky assets, Lehman filed for bankruptcy on September 15—the largest failure among investment banks since 1990. Subsequently, Geithner, Paulson, and Bernanke explained that Lehman’s financial condition precluded a lawful government bailout.

Geithner also played a crucial role in addressing the crisis surrounding American International Group (AIG). As credit downgrades increased collateral requirements on AIG’s credit default swaps, by September 2008 AIG faced a severe capital shortfall. After initially declining AIG’s request for government funding and advocating private-sector solutions, Geithner and Paulson ultimately proposed an $85 billion loan in exchange for a controlling equity stake and veto authority over dividend payments, effectively bringing AIG under government control.

Following Lehman’s collapse, money market funds such as the Reserve Primary Fund, which held substantial Lehman securities exposure, encountered liquidity problems. Despite appeals for support, Geithner’s Federal Reserve declined intervention; consequently, the Primary Fund froze redemptions and "broke the buck," marking only the second occurrence of this kind in industry history.

To restore market stability, Geithner recommended that investment banks Goldman Sachs and Morgan Stanley convert into bank holding companies to gain access to funding; both completed these conversions by September 21.

Together with Paulson, Geithner championed enhanced Treasury powers aimed at combating the financial crisis. Paulson described him as "a very unusually talented young man...[who] understands government and understands markets."

Nomination and confirmation

In the 2008 presidential race, Geithner was regarded as a possible candidate for Treasury Secretary by both John McCain and Barack Obama. On November 24, 2008, President-elect Obama declared his plan to nominate Geithner for the role.

During the confirmation process, it emerged that Geithner had failed to pay $35,000 in Social Security and Medicare payroll taxes from 2001 through 2004 while employed at the International Monetary Fund (IMF). Although the IMF covered employer payroll tax obligations, it did not withhold employee contributions. Geithner had reimbursed the employer portion but neglected to pay the employee share. These discrepancies, along with other deduction mistakes, were uncovered during a 2006 IRS audit. Afterward, Geithner settled the outstanding tax amounts and characterized the errors as "careless" and "unintentional." He testified that he used TurboTax to prepare his returns but accepted full accountability.

On January 26, 2009, the Senate confirmed Geithner’s appointment with a 60–34 vote. He took the oath of office administered by Vice President Joe Biden in President Obama's presence.

Bailouts

Geithner oversaw the deployment of the second half of $350 billion from the $700 billion Emergency Economic Stabilization Act of 2008. Within the framework of the Financial Stability Plan, he proposed establishing an investment vehicle to acquire legacy "toxic assets" utilizing both taxpayer funds and private capital. Additionally, he sought to broaden a lending initiative that could allocate up to $1 trillion to back consumer loan-backed securities issuance and inject fresh capital into banks. In return, financial institutions were required to restrict executive pay, dividends, and corporate acquisitions. This strategy drew criticism from Nobel Prize-winning economists Paul Krugman and Joseph Stiglitz.

Combining the Troubled Asset Relief Program (TARP) with the federal takeover of Fannie Mae and Freddie Mac led to $620.3 billion in Treasury disbursements through expenditures, investments, and loans. By July 2016, $689 billion had been reimbursed primarily via repayments and dividend income.

AIG bonuses

Despite President Obama’s endorsement of Geithner, public backlash erupted in early 2009 over AIG’s distribution of $165 million in bonuses to its financial products unit following a $170 billion government bailout. These payments stemmed from contracts established before federal intervention and were considered legally binding by a joint committee comprising the Federal Reserve, Ernst & Young, and AIG.

Geithner’s team had engaged with AIG regarding compensation matters prior to and during his time at Treasury; however, he only became aware of these bonus arrangements on March 10, 2009. He promptly objected to AIG CEO Ed Liddy and sought renegotiation of these agreements. Subsequently, Liddy requested employees receiving bonuses exceeding $100,000 return half of their payments. At Geithner’s insistence, bonuses for the top 50 executives were reduced by fifty percent and linked to performance criteria.

AIG payments to banks

In November 2009, Neil Barofsky, Treasury Inspector General for TARP oversight, criticized the use of $62.1 billion in government funds to settle derivative contracts held by major banks insured by AIG. These banks were paid full face value despite the contracts’ market worth being significantly lower, effectively awarding tens of billions they might not have otherwise obtained. The terms were negotiated by the New York Federal Reserve under Geithner’s leadership.

In January 2010, Representative Darrell Issa released emails revealing that the Federal Reserve encouraged AIG to limit disclosure of these payments in public statements and SEC filings. Issa called for investigations and subpoenas related to Fed documents. Representative Edolphus Towns, Chairman of the House Oversight Committee, issued subpoenas and arranged hearings. Federal Reserve Chairman Ben Bernanke supported a comprehensive review of the Fed’s involvement in these transactions.

On January 27, both Geithner and former Treasury Secretary Henry Paulson testified before the Committee defending the AIG bailout and bank payments while denying any role in concealing transaction details. Their statements were met with bipartisan doubt and criticism from members of the House.

Making Home Affordable

In his book Bailout: How Washington Abandoned Main Street While Rescuing Wall Street, Neil Barofsky contends that Geithner never planned to implement the Home Affordable Modification Program (HAMP) in the way Congress had intended. Instead of focusing on foreclosure prevention, Geithner anticipated that banks would allow foreclosures to proceed, estimating they could manage "ten million foreclosures, over time," with HAMP serving as a mechanism to "foam the runway" and spread out their financial impact. Banks declined 72% of borrower applications under HAMP, with Citimortgage and JPMorgan Chase ranking among the highest in rejections. As a result, only 887,001 homeowners received assistance, far fewer than the over 4 million initially projected.

China

During his Senate confirmation process, Geithner asserted that the Obama administration regarded China as engaging in currency "manipulation" and intended to respond "aggressively" through diplomatic efforts aimed at altering these practices, which were believed to disadvantage U.S. companies and contribute to the 2008 financial crisis. Shortly after assuming office as Treasury Secretary, Geithner met with Chinese Foreign Minister Yang Jiechi, stressing the critical nature of U.S.–China relations and the necessity of collaboration for global economic recovery.

On June 1, 2009, after delivering remarks at Peking University, Geithner reassured a student audience that Chinese investments in U.S. Treasury securities were "very safe," eliciting laughter from those present.

Geithner took on the role of co-chair for the first-ever U.S.–China Strategic and Economic Dialogue in July 2009, where he led the U.S. Economic Track.

In September 2011, he publicly criticized China for facilitating widespread intellectual property theft from the United States and neglecting to enforce protections vital for advanced economies. He characterized China's long-term approach as aggressively demanding technology transfers as a prerequisite for access to its manufacturing sector.

Opposition to extending tax cuts

During the summer of 2010, The New York Times reported that Geithner was President Obama's principal opponent against prolonging the Bush tax cuts for high-income earners beyond their scheduled expiration on December 31. He pointed to the anticipated $700 billion cost over ten years and referenced studies indicating that these tax breaks fail to stimulate economic growth since wealthy individuals are more likely to save than spend additional income. Geithner declared, "there is no credible argument... to borrow from future generations to finance an extension of tax cuts for the top 2 percent."

Fiscal cliff and debt ceiling negotiations

As Obama's chief negotiator during discussions over the fiscal cliff and the 2013 debt limit increase, Geithner stated on December 5, 2012, that the administration was "absolutely" prepared to allow the nation to go off the fiscal cliff if Republicans did not agree to raise taxes on affluent Americans. This stance highlighted the administration's unwavering commitment to safeguarding revenue from high earners amid crucial budget talks.

Criticism

During the initial phase of President Obama's administration, Geithner encountered scrutiny, particularly from Congressman Connie Mack (R-FL) related to the controversy over AIG bonuses, as well as from Alabama Senator Richard Shelby, who asserted that Geithner was "uninformed." Nonetheless, he maintained considerable backing from Democrats, and discussions about his stepping down never gained traction.

In November 2009, Oregon Representative Peter DeFazio alongside several members of the Progressive Caucus demanded the dismissal of Geithner and Lawrence Summers as a measure to combat unemployment and redirect fiscal strategies. At a Congressional Joint Economic Committee session that same month, House Republican Kevin Brady called for Geithner’s resignation, citing a decline in public trust. Geithner rebutted these claims and defended his performance.

By June 2011, The New Republic issued criticism from a left-leaning perspective, arguing that Geithner’s emphasis on deficit reduction following the Great Recession curtailed the potential scale of the stimulus package.

Post-Treasury career

Geithner departed from his role in the Obama administration on January 25, 2013, subsequently joining the Council on Foreign Relations as a Distinguished Fellow. In March 2014, he was appointed president and managing director at Warburg Pincus, a prominent private equity firm. By February 2016, JPMorgan Chase extended a credit facility to facilitate investments by Warburg Pincus executives into a new multibillion-dollar fund. In July 2023, Geithner advanced to chairman of Warburg Pincus. Additionally, on October 7, 2014, he provided testimony in Starr v. United States, a case accusing the government of unfairly acquiring a 79.9% stake in American International Group shareholders.

In July 2018, The Washington Post revealed that Mariner Finance—owned by Warburg Pincus where Geithner serves as President—was involved in predatory lending practices; former staff described its business model as exploiting economically vulnerable individuals. This disclosure sparked concerns about private equity firms benefiting from high-risk consumer lending operations.

Geithner also teaches at the Yale School of Management and serves as co-chair on the board of directors for the International Rescue Committee. His memoir, Stress Test: Reflections on Financial Crises, was released in May 2014. In the 2022 edition of the Handbook of Financial Stress Testing, he offers insights into financial stress testing methodologies and proposes directions for future development.

In April 2016, Geithner joined seven other former Treasury secretaries in urging the United Kingdom to remain within the European Union ahead of the June referendum.

Personal life

On June 8, 1985, Geithner married Carole Marie Sonnenfeld—his Dartmouth classmate—at his family’s summer residence in Orleans, Massachusetts. She is a licensed clinical social worker and serves as an assistant clinical professor of psychiatry and behavioral sciences at George Washington University School of Medicine, where she instructs medical students in listening skills. Sonnenfeld is also an author of a children’s coming-of-age novel centered on grief. Her father, Albert Sonnenfeld, was a professor specializing in French and Comparative Literature at Princeton University and worked as a food critic; her mother Portia passed away when Carole was 25 years old shortly after her marriage.

Media

In the HBO production Too Big to Fail, Geithner was depicted by Billy Crudup, while Alex Jennings portrayed him in the BBC television film The Last Days of Lehman Brothers.

Memberships

Board of Directors, Center for Global Development
Member, Council on Foreign Relations
Trustee, Economic Club of New York
Affiliation with Bank for International Settlements
Participant in the Bilderberg Group

Published works

External links

Timothy F. Geithner | Warburg Pincus
Compilation of works by Timothy Geithner
The New York Times coverage on Timothy F. Geithner
Appearances on C-SPAN