Late yesterday, the Senate confirmed Timothy Geithner, outgoing president of the Federal Reserve Bank of New York (FRBNY), as the 75th U.S. Treasury Secretary, by a vote of 60 to 34, after the Senate Finance Committee approved his nomination last Thursday.
At Geithner’s swearing-in ceremony, administered by Vice President Biden, President Obama stated that the work of the Treasury Department “must begin at once,” as “we cannot lose a day, because every day, the economic picture is darkening, here and across the globe.” After being sworn in, Geithner stated that “we are at a moment of maximum challenge for our economy and our country,” and pledged all of his ability to help meet the challenge. Geithner set forth a broad agenda for the Treasury Department, including “launch[ing] programs that will bring economic recovery sooner, mak[ing] our economy more productive, restor[ing] trust in our financial system with fundamental reform, mak[ing] our tax system better at rewarding work and investment, more fair and more simple.”
In his first move as Treasury Secretary, Geithner today announced various reforms to the Emergency Economic Stabilization Act (EESA), including new rules intended to “limit the influence of lobbyists and special interests in the EESA process and ensure that investment decisions are guided by objective assessments in the best interest of the health and stability of the financial system.” The new reforms include the following:
- Combating lobbyist influence in the EESA process by implementing various safeguards, including “restricting contacts with lobbyists in connection with applications for, or disbursements of, EESA funds”;
- Protecting EESA funding decisions from political influence;
- Providing certification to Congress from the Office of Financial Stability (OFS) that each investment decision is based on objective investment criteria; and
- Ensuring that the investment process is based on transparency and objective criteria, including establishing eligibility requirements, publishing descriptions of the review process and formulating standard procedures for the application process.
In related news, the FRBNY today announced that it had named William C. Dudley to succeed Geithner as President and Chief Executive Officer of the FRBNY, after he won approval by the Federal Reserve Board of Governors. Prior to today’s appointment, Dudley was executive vice president of the Markets Group at the FRBNY and manager of the System Open Market Account for the Federal Open Market Committee. Before joining the FRBNY in January 2007, he was a partner, managing director and chief economist at Goldman, Sachs & Co.