Geithner Is Said to Be Obama’s Pick for U.S. Treasury Secretary

Financial News

Nov. 22 (Bloomberg) -- President-elect Barack Obama picked Timothy Geithner, head of the Federal Reserve Bank of New York, to be his Treasury secretary, with Lawrence Summers getting a senior White House role, a Democratic aide said.

Summers, former President Bill Clinton’s last Treasury chief, would be positioned to succeed Ben S. Bernanke as Fed chairman in 2010. Obama is likely to announce his economic team on Nov. 24, the aide said on condition of anonymity.

Geithner is a veteran who has helped lead the effort to end the deepest financial crisis in seven decades and at the same time has spent most of his career outside the public eye. The top task of the new team will be assembling Obama’s pledged stimulus package to buttress an economy that may be in its worst recession in a quarter century.

Obama is assembling “very strong people, very qualified people,” said Allen Sinai, chief economist at Decision Economics in New York. “But the reality of the problems of the economy, the financial markets, our banking system both domestically and globally, and the long list of problems we have to deal with as a society, that is very daunting.”

Geithner, 47, has helped oversee some of the biggest decisions so far in the crisis, as head of the U.S. central bank’s main liaison with Wall Street. Those include the government’s takeover of American International Group Inc., the Fed’s Bear Stearns Cos. rescue, and decision to let Lehman Brothers Holdings Inc. fail in September.

Top Spokesman

Both Geithner and Summers are veterans of managing financial turmoil, working together on the Asian financial crisis of 1997-98 and staving off a Mexican default earlier that decade. Even with that background, Geithner would be taking on an unfamiliar role: the government’s chief economic spokesman. more