TIM GEITHNER, America’s beleaguered treasury secretary, faces a critical test of his credibility when he unveils a much-awaited plan to take toxic assets off bank balance sheets, in an announcement that could come as soon as tomorrow.
Mr Geithner, whose initial announcement last month on the troubled asset purchase plan dis-appointed the market, has become the target of harsh criticism in Washington and on Wall Street, with some questioning whether he can deliver.
Senior Democratic figures questioned whether Mr Geithner would have the credibility with the markets and Capitol Hill to push through a new request for funds. “The more time passes, the more convinced I am that Tim Geithner is becoming a liability for the administration,” said one.
Analysts say Barack Obama would face steeper odds persuading Congress to authorise more money to recapitalise the banking sector if Mr Geithner was the one making the request. Mr Obama included a $250 billion financial sector bailout item in the budget he announced last month, implying that the administration would need up to $750 billion more in troubled asset funds.
“I don’t think Tim Geithner will last beyond June – he has no credibility with the markets,” said Chris Whalen, managing director of Institutional Risk Analytics, a financial research group. But defenders of Mr Geithner say that he is being unfairly singled out as the lightning rod for growing public anger on Wall Street’s misuse of taxpayer funds.
“I am quite certain that Tim Geithner has the full backing of the president and will continue to have it,” said Roger Altman, a former senior treasury official in the Clinton administration. “The main question is can anybody, including president Obama himself, persuade Congress to give new money in this climate?” – (Financial Times service)
