By CATHERINE RAMPELL
Treasury Secretary Timothy Geithner is being interviewed on the “PBS NewsHour” tonight about the administration’s new bank proposal, a k a “the Volcker Rule,” released today. Here are a couple of highlights from the interview, according to a transcript released by PBS. (Sorry, I can’t find a link yet.)
Here is how Mr. Geithner explains today’s banking proposal:
The basic principle is that banks that have the privilege of taking advantage of the safety net should not use that to subsidize risky activity. I think it’s a simple principle, I think people can understand that and we’re going to do it in a careful, well-designed way.
And here he is asked what motivated the timing behind this announcement, but doesn’t really answer:
JUDY WOODRUFF: A couple of questions about the timing, Mr. Secretary. Former Federal Reserve Board Chairman Paul Volcker, who heads up the Economic Recovery Board for the president, he has publicly advocated this for the last year. He’s been very open about it. He told reporters last summer the president had said no to this. What changed the president’s mind?
MR. GEITHNER: I am – I would just want you to know – very close to Paul Volcker, have enormous respect for him. And the president and I have been talking to him about this for a long period of time. And you saw in the House bill that passed the House and even in the draft Senate bill a provision that was very responsive to Paul Volcker’s ideas. And this provision would give the Fed the authority to impose these types of restrictions, exactly these types of restrictions. We thought it was time now to provide a little more clarity though about what this would mean because as I said, we’re at this critical moment where we need to make the last push to get reforms through the Senate. And that’s why –
MS. WOODRUFF: But why not do it earlier?
MR. GEITHNER: Well, we’ve been – again, we’ve been working on how best to do this for some time. And we thought now was the time to bring some clarity to it.
MS. WOODRUFF: And I also ask because as you well know, there are voices out there today saying this is largely politically driven, that coming on the heels of the Massachusetts Senate outcome, a Republican won. You have polls showing Americans increasingly unhappy about administration policies, a sense the administration has been too soft on Wall Street, that that’s really what’s behind this.
MR. GEITHNER: That’s not what’s behind this. I’ve read that. I’ve heard that. But the president asked us to work on this going back several weeks. We’ve provided these recommendations to him two weeks ago. And again, the timing is driven by the fact that we’re at this moment in this very important cause we’re fighting, which is to get financial reform through this next stage of the process in the Senate.
Here is how Mr. Geithner explains today’s banking proposal:
The basic principle is that banks that have the privilege of taking advantage of the safety net should not use that to subsidize risky activity. I think it’s a simple principle, I think people can understand that and we’re going to do it in a careful, well-designed way.
And here he is asked what motivated the timing behind this announcement, but doesn’t really answer:
JUDY WOODRUFF: A couple of questions about the timing, Mr. Secretary. Former Federal Reserve Board Chairman Paul Volcker, who heads up the Economic Recovery Board for the president, he has publicly advocated this for the last year. He’s been very open about it. He told reporters last summer the president had said no to this. What changed the president’s mind?
MR. GEITHNER: I am – I would just want you to know – very close to Paul Volcker, have enormous respect for him. And the president and I have been talking to him about this for a long period of time. And you saw in the House bill that passed the House and even in the draft Senate bill a provision that was very responsive to Paul Volcker’s ideas. And this provision would give the Fed the authority to impose these types of restrictions, exactly these types of restrictions. We thought it was time now to provide a little more clarity though about what this would mean because as I said, we’re at this critical moment where we need to make the last push to get reforms through the Senate. And that’s why –
MS. WOODRUFF: But why not do it earlier?
MR. GEITHNER: Well, we’ve been – again, we’ve been working on how best to do this for some time. And we thought now was the time to bring some clarity to it.
MS. WOODRUFF: And I also ask because as you well know, there are voices out there today saying this is largely politically driven, that coming on the heels of the Massachusetts Senate outcome, a Republican won. You have polls showing Americans increasingly unhappy about administration policies, a sense the administration has been too soft on Wall Street, that that’s really what’s behind this.
MR. GEITHNER: That’s not what’s behind this. I’ve read that. I’ve heard that. But the president asked us to work on this going back several weeks. We’ve provided these recommendations to him two weeks ago. And again, the timing is driven by the fact that we’re at this moment in this very important cause we’re fighting, which is to get financial reform through this next stage of the process in the Senate.
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