Geithner: 'I Don't Think All Banks Get It Yet.' Gee, I Wonder Why.
By Susie Madrak Monday Dec 28, 2009 8:00am
Earlier this week, George Stephanopoulos had an interview with Timothy Geithner:
GEITHNER: You know, I think it's very important banks work very hard to start to rebuild trust and confidence of the American people in their institutions in the financial system. They did a huge amount of damage to the country, lost a huge amount of trust and confidence. They need to work very hard to restore that. One of the ways to do that...
STEPHANOPOULOS: Do you think they get that?
GEITHNER: I don't think they get it. I think some banks do; I don't think all banks get it yet.
STEPHANOPOULOS: What do they need to do to show that they get it?
GEITHNER: I think they need to make sure they're doing everything they can to help people who can afford to stay in their homes stay in their homes, help make sure they are lending in communities that need access to credit, they're working very hard to make sure that viable businesses that face some increased demand for orders now for their products now can get the credit they need.
They need to show some restraint and care in how they pay their people, and they need to be supportive of the kind of reforms we need to create a more stable system in the future.
STEPHANOPOULOS: That's all encouragement. Where's the stick?
GEITHNER: The stick is through what Congress is going to have to legitimate through reforms. You know, we're not going to run a strategy to protect the country from future financial crises that rests on the hope that banks in the future behave more wisely and more nobly. We're going to run a strategy that requires reforms that are going to -- going to restrain risk-taking, provide better protections for consumers.
Really, Tim? Because I don't hear anything like reform happening in Congress. In fact, voters might somehow get the wrong idea (or the right idea) about your banking bailout after stories like this:
Dec. 21 (Bloomberg) -- In the first six months of 2010, about 6,000 employees of Goldman Sachs Group Inc. will take a break from their spreadsheets and move across the southern tip of Manhattan to a new 43-story, steel-and-glass skyscraper.
The building was a bargain -- and not just because the final cost is expected to be $200 million less than the $2.3 billion price the company had estimated when construction began in November 2005. Goldman Sachs also benefited from the government’s determination to avoid losing jobs in lower Manhattan after the Sept. 11, 2001, terrorist attacks.
Building a new headquarters cater-cornered to where the World Trade Center once stood qualified the firm to sell $1 billion of tax-free Liberty Bonds and get about $49 million of job-grant funds, tax exemptions and energy discounts. Henry Paulson, then Goldman Sachs’s chief executive officer, threatened to abandon the project after delays in addressing his concerns about safety. To keep the plan on track, state and city officials raised the bond ceiling to $1.65 billion and added $66 million in benefits. The interest expense on the financing is about $175 million less over 30 years than if the company had issued corporate debt at the time, according to data compiled by Bloomberg.
“It was absolutely imperative that Goldman Sachs keep its world headquarters downtown,” says John Cahill, who took part in the negotiations as chief of staff to then-Governor George Pataki and now works at New York law firm Chadbourne & Parke LLP. “They had the financial resources to move anywhere.”
