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Geithner Pushes to Restrict, Not Ban Derivatives

Posted on Apr 16, 2010
AP / Jose Luis Magana

Treasury Secretary Timothy Geithner testifies on financial regulatory reform in late 2009.

In a letter to a ranking Senate Democrat, Treasury Secretary Timothy Geithner called for restrictions on derivatives—those financial instruments whose value is derived from other instruments—but stopped at an outright ban on the trading practices that helped lead to the current financial crisis.

Geithner said that derivatives were “at the very center of the financial crisis,” though he did not endorse a proposal by Democrats to ban the derivative business entirely.

Read Geithner’s letter in pdf form here.

The Wall Street Journal:

Treasury Secretary Timothy Geithner said Thursday in a letter that tight restrictions on derivatives is “at the core” of a sweeping overhaul of financial rules but didn’t call for the outright ban on trading by banks that some Democrats are pushing.

Mr. Geithner, in a letter to Senate Agriculture Committee Chairman Blanche Lincoln (D., Ark.), said new financial rules must create restrictions on how over-the-counter derivatives are traded “in order to curb abuses that were at the very center of the financial crisis.” But he notably stopped short of endorsing a proposal from Ms. Lincoln to force large banks to spin off derivatives trading businesses entirely.

His letter is the latest in a forceful push by the Obama administration to counter a lobbying effort by financial companies to scale back the derivatives rules.

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By the worm, April 18, 2010 at 10:15 am Link to this comment

Geithner remains a ball and chain for the Obama administration.

At a time when the administration should be beating the drum about what it’s
doing for the middle class, Obama has Summers telling folks about all the
swell things Obama’s done for the middle class and Geithner telling folks about
the need to create loop holes for “derivative lite”.

As Ricki Ricardo once said of another: “You got some ‘splaining to do’ and
these two bazookas should not be your spokespersons.

Both are tarred with scandal; both facilitated the biggest single swing in wealth
from the middle class to the wealthy; neither have an once of credibility with
the public; and either’s presence brings to mind the darkest and greediest days
of your administration - in which bankers feasted on the ‘bailouts’, gave one
another huge bonuses ( I assume each was rewarding the other for persuading
the government to pay of their bad loans “Congratulations ! You got the
government to cover our bad bets! Well, that deserves a bonus!” ) and then
cried ‘Me no Alamo!’: With Summers, Geithner and Bernanke enabling it all.

Why you keep them and, if you must keep them, why you let them speak for
your administration is beyond comprehension.

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By doublestandards/glasshouses, April 17, 2010 at 9:09 am Link to this comment
(Unregistered commenter)

Who hired Geithner?  TD likes to overlook the answer to that question as if it doesn’t matter.

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By ocjim, April 16, 2010 at 4:05 pm Link to this comment

Geithner always has been one of the Wall Street crowd. I think we must face the fact that Obama knew this when he appointed Geithner. Average Americans will get no justice and no solution regarding the Wall Street predators until we force Congress and the Obama administration to impose them.

Angry Americans, especially the teapartiers, provide no true and rational direction for their anger.

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amunaor's avatar

By amunaor, April 16, 2010 at 4:02 pm Link to this comment

((RE: samosamo, April 16 at 7:21 pm—I will never forget or forgive o for hiring this crook and the others he kept from w’s administration.))

Me neither, but on the other hand, what better way to clean the infested nest than by turning the individuals that shat in it into a mop. Ha…ha…ha!

Peace, Best Wishes and Hope


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By samosamo, April 16, 2010 at 3:21 pm Link to this comment

The picture of geithner is really tell tale. Now that someone,
somewhere in congress seems to be doing the job they elected to
do, mfcs geithner is ‘pleading’ to not totally ban these favorites of
corruption and grand larceny, derivatives.

‘Oh no, don’t ban them just make a couple little rules ‘regulating
them, please sir’ as plain as day I can hear that whining bastard
begging to don’t take the fun out of financial sexual intercourse.

I will never forget or forgive o for hiring this crook and the others
he kept from w’s administration who have done everything they
could to enhance their and their ‘frat boy’ friend’s personal and
financial gains at the expense of the taxpayer, put pelosi and
reid’s names on that also.

But it ain’t over yet, there is always the criminal bribery of elected
personages via lobbyists that can very well stem the tide of
financial terrorism accountability. And that in itself could be a
help because not only should those bribing elected officials be
indicted and prosecuted, but also those elected officials making
out like the bandits who are taking those bribes, all of which is
influence peddling, should be indicted and prosecuted, if
congress and law enforcement were doing their job.

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By Druthers, April 16, 2010 at 2:57 pm Link to this comment

Geithner is beginning to look like a farmer who thinks he can get a little more milk out of an old cow before sending her to the slaughter house.

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Allan Krueger's avatar

By Allan Krueger, April 16, 2010 at 1:09 pm Link to this comment

Maybe they could get Madoff out of prison to help Geitner with this newest, SCAM-arama!

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amunaor's avatar

By amunaor, April 16, 2010 at 12:30 pm Link to this comment

The picture of Geithner says it all; the head Magician for the ‘Free Marketeers’, casting sleepy dust into the eyes of the playful public, enticing everyone to come back in for a dip, in preparation for another looting.

The more things change, the more they stay the same!!!

Peace, Best Wishes and Hope

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