Geithner's Legacy: Contention Through Financial Storms
Critics say Geithner should have taken a harder line in forcing mortgage servicers to modify home loans. They also say he should have pushed hard to let struggling homeowners reduce their loan principal.
But Geithner's supporters say he had to deal with congressional Republicans who felt the government shouldn't be helping people escape their debts.
FINANCIAL REGULATION
In 2010, Congress passed what the Obama administration hailed as the stiffest restrictions on banks and Wall Street since the Great Depression. The legislation, named for Sen. Christopher Dodd and Rep. Barney Frank, both Democrats, contained proposals crafted by Geithner.
It authorized the government to break up companies considered a risk to the financial system. It created an agency to safeguard consumers. And it aimed to tighten scrutiny of complex financial instruments that had previously escaped regulatory oversight and had fueled the crisis.
Geithner said the bill would reduce the risk of another crisis. But critics saw the legislation as flawed. Republicans said it created obstacles to the smooth operation of financial markets. And liberals said Geithner didn't go far enough to try to curb the worst abuses. They complained that he caved to pressure from banks to weaken the reforms.
The argument will likely continue long after Geithner's exit. Since taking control of the House in the 2010 election, Republicans have sought to dismantle Dodd-Frank.
Democrats are pushing for studies of how much benefit large banks enjoy from being deemed "too big to fail." Many Democrats want to require struggling financial firms to be dismantled rather than having taxpayers save them.
