GO
Loading...

CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S STEVE LIESMAN INTERVIEWS TREASURY SECRETARY TIMOTHY GEITHNER TODAY ON CNBC'S "POWER LUNCH"

WHEN: Today, Wednesday, March 25th at 12PM ET

WHERE: CNBC's "Power Lunch"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Treasury Secretary Timothy Geithner today on CNBC's "Power Lunch."

All references must source CNBC.

----------------------------------------------------------------

HERERA: TREASURY SECRETARY TIM GEITHNER SITTING DOWN MOMENTS AGO WITH OUR STEVE LIESMAN TO TALK ABOUT A VARIETY OF THINGS IT WAS A ONE-ON-ONE ABOUT THE TOXIC ASSET PLAN AND A WHOLE LOT MORE WHAT DID HE TELL YOU STEVE

LIESMAN: WE HAD A PRETTY INTERESTING ABOUT THE ECONOMIC DATA AND OF COURSE IT WAS THE FIRST INTERVIEW AFTER THE TOXIC ASSET PLAN CAME OUT SO WE TALKED ALOT ABOUT THAT AND AFFECT ON TOXIC ASSETS AND THE AFFECT ON THE OVERALL ECONOMY AND WE WENT GLOBAL AS WELL GIVE A LISTEN

GEITHNER: WELL WE'VE SEEN A LOT OF ADJUSTMENT ACROSS THE U.S. ECONOMY ACROSS THE GLOBAL ECONOMY AND YOU'RE SEEING THE PACE OF DETERIORATION START TO SLOW IN SOME AREAS AND I THINK THAT'S PROMISING BUT ITS GOING TO TAKE SOME TIME TO WORK THROUGH AND WE NEED TO MAKE SURE THE GOVERNMENT IS PUTTING ENOUGH FORCE ON THE ECONOMY AS A WHOLE AND INTO THE FINANCIAL SYSTEM SO THAT WE BRING RECOVERY BACK AS SOON AS POSSIBLE

LIESMAN: DO YOU FEEL LIKE THE PIECES ARE NOW IN PLACE DO WE HAVE ALL OF THE PROGRAMS WE ARE GOING TO GET BASICALLY HERE FROM THE GOVERNMENT?

GEITHNER: WE HAVE A VERY POWERFUL BROAD SET OF THINGS IN PLACE NOT JUST FOR RECOVERY TO GET PEOPLE BACK TO WORK TO GET PRIVATE INVESTMENT FLOWING AGAIN BUT TO HELP GET THE FINANCIAL SYSTEM WORKING BETTER SO IT'S PROVIDING THE CREDIT NECESSARY FOR RECOVERY

LIESMAN: WHEN IT COMES TO WHAT'S LEFT OF THE TARP $300 BILLION DOLLARS THERE IS A PIECE GOING TO FORECLOSURE MITIGATION AND NOW YOU ARE GOING TO USE SOME OF THE MONEY FROM THE TARP FOR THE TOXIC ASSET PLAN

GEITHNER: AS WE COMMITTED INITIALLY

LIESMAN: AS YOU COMMITTED INITIALLY IS THERE ENOUGH MONEY THERE ARE YOU GOING TO HAVE TO GO BACK FOR MORE

GEITHNER: THERE'S SUBSTANTIAL RESOURCES IN THE TARP NOW WE ARE GOING TO USE THOSE AS QUICKLY AND AFFECTIVELY AS POSSIBLE BUT WE'VE ALWAYS SAID THAT THIS CRISIS MAY REQUIRE MORE RESOURCES TO DEAL WITH AFFECTIVELY AND WE ARE GOING TO MAKE SURE WE WORK WITH THE CONGRESS OVER TIME SO WE CAN DO THIS ON A SCALE THAT'S GOING TO BRING RECOVERY BACK AS SOON AS POSSIBLE.

LIESMAN: WHAT'S THE HORIZON ON THAT IS THIS SOMETHING THAT YOU THINK WHAT YOU HAVE NOW COULD LAST YOU A YEAR OR WILL YOU HAVE TO GO SOONER TO CONGRESS ON THAT

GEITHNER: IT'S ENOUGH TO DO THIS ON A SIGNIFICANT SCALE AND THAT'S WHAT WE'RE GOING TO DO

LIESMAN: THERE IS A LOT OF CONCERN THAT THE PLAN YOU PUT OUT THAT WALL ST INVESTORS WILL NOT GO FOR BECAUSE THERE ARE CONCERNS ABOUT EXPOST FACTO TAKING OR RULES THAT WOULD TAKE THEIR PROFITS YOU SAID YESTERDAY IN TESTIMONY THAT SOMETHING NEEDS TO BE DONE ABOUT THIS WHAT SPECIFICALLY CAN BE DONE OR SAID EITHER BY CONGRESS OR THE TREASURY

GEITHNER: ON RESOLUTION AUTHORITY

LIESMAN: NOT ON RESOLUTION ON THE ISSUE OFTHE INVESTORS WHO COMMIT TO THE TOXIC ASSET PLAN WHAT COULD BE DONE SPECIFICALLY HERE TO GIVE INVESTORS INSURANCE THAT YOU WON'T TAKE THEIR PROFITS

GEITHNER: I THINK YOU'RE RIGHT FOR US TO GET THROUGH THIS INVESTORS NEED TO BE WILLING TO TAKE RISKS THE GOVERNMENT IS GOING TO HAVE TO TAKE SOME RISKS BUT WE NEED THE INVESTORS AND THE MARKETS TO TAKE RISKS TOO ALONGSIDE US AND IF THEY ARE GOING TO DO THAT THEY NEED TO HAVE GREATER CONFIDENCE THAN THEY DO TODAY THERE'S GOING TO BE A CLEAR SET OF RULES OF THE GAME CONSISTENTLY ENFORCED AND I THINK WE'LL GET TO THE RIGHT BALANCE ON THIS ISSUE

LIESMAN: WHAT IS THE RIGHT BALANCE IS IT CONGRESS PASSING SOME SORT OF RULE THAT SAYS THEY WON'T GO BACK AT THOSE PROFITS OR IS IT SOMETHING IN THE RULES OF THE TREASURY

GEITHNER: THERE IS A RANGE OF WAYS TO DO THIS BUT I THINK WE WILL GET TO THE RIGHT BALANCE

LIESMAN: ONE OF THE CONCERNS WHEN IT COMES TO THE MARK-TO-MARKET ACCOUNTING ISSUE IS THE CAPITAL REQUIREMENTS THAT CREATES MARK-TO-MARKET ACCOUNTING IS SOMETHING THAT IS IN -- (UNITEL) -- IN THE SEC BUT YOU YOU AS A CHIEF BANKING REGULATOR PRIVY OVER CAPITAL REQUIREMENTS. WILL YOU CONSIDER PROVIDING SOME CAPITAL RELIEF TO THE BANKS ESPECIALLY WHEN THEY SELL ASSETS INTO WITH THE TOXIC ASSET PLAN

GEITHNER: STEVE TWO THINGS THAT ARE REALLY IMPORTANT ARE WE WANT TO MAKE SURE THAT PEOPLE HAVE CONFIDENCE IN THE QUALITY OF DISCLOSURE OVER OUR FINANCIAL INSTITUTIONS WE WANT TO MAKE SURE THAT CONFIDENCE IS INCREASED NOT REDUCED WE ALSO WANT TO MAKE SURE THAT THE MARKETS UNDERSTAND THERE WILL BE ENOUGH CAPITAL IN THE SYSTEM SO THERE'S ENOUGH LENDING CAPACITY TO GET THROUGH THIS KIND OF RECESSION WE ARE GOING THROUGH NOW THOSE ARE THE TWO OBJECTIVES THAT GUIDE EVERYTHING WE DO AND I THINK WE'RE IN A GOOD PLACE ON THAT FRONT

LIESMAN: SO CAPITAL RELIEF IN TERMS OF THE REGULATORY CAPITAL RELIEF IS NOT SOMETHING HIGH ON YOUR LIST AT THIS POINT

GEITHNER: NO CAPITAL EXIST TO BE USED THAT'S WHAT IT'S FOR YOU WANT TO HAVE STRONG CUSHIONS OF CAPITAL IN GOOD TIMES SO THAT THEY CAN BE USED AS YOU GO INTO A DOWNTURN LIKE THIS BUT THE REALLY IMPORTANT THING IS THAT THE MARKETS HAVE CONFIDENCE THERE WILL BE ENOUGH CAPITAL THERE AND THEY'RE ABLE TO AJUDGE THAT WITH A QUALITY OF DISCLOSURE THAT'S STRONGER THAN WE HAVE NOW

LIESMAN: AND YOU'RE NOT CONCERNED THOUGH ABOUT THE KIND OF HITS THE BANKS COULD TAKE WHEN THEY SELL THESE ASSETS I UNDERSTAND THAT THE PROGRAM WILL KIND OF REDUCE THE LIQUIDITY DISCOUNT BUT IT WON'T REDUCE THE CREDIT DISCOUNT THAT IS IN THESE ASSETS

GEITHNER: WHAT WE'RE DOING IS GIVING THEM AN OPPORTUNITY TO DO SOMETHING THEY CAN'T NOW DO CAUSE THERE'S NO FINANCING AVAILABLE IN THE MARKETS BY GIVING THEM A CHANCE TO SELL INTO A MARKET THEY'LL HAVE A BETTER CHANCE TO SHOW A CLEANER INSITUTION TO PRIVATE INVESTORS BETTER ABLE TO RAISE PRIVATE CAPITAL IF THEY NEED THAT AND THAT'S A GOOD THING FOR THE SYSTEM IT WILL ALLOW US TO REPLACE PUBLIC CAPITAL WITH PRIVATE CAPITAL AS SOON AS POSSIBLE AND HAVE A MIX OF CAPITAL THAT AGAIN RELIES MORE ON PRIVATE INVESTORS

LIESMAN: ADD UP ALL OF THE THINGS WE'RE TALKING ABOUT TRILLION DOLLAR DEFICITS FOR SEVERAL YEARS IS THERE CONCERN THAT FOREIGN INVESTORS WILL NOT BUY U.S. DEBT AND IS THERE CONCERN ABOUT THE VALUE OF THE DOLLAR

GEITHNER: NO EVIDENCE OF THAT CONCERN TODAY I WANT TO SAY AND SAY THIS CLEARLY A STRONG DOLLAR IS IN AMERICA'S INTEREST WE'RE GOING TO MAKE SURE WE'RE PURSUING POLICIES THAT IMPROVE THE LONGTERM FUNDAMENTALS OF THE U.S. ECONOMY AND YOU SAW IN THE PRESIDENT'S BUDGET A VERY VERY CLEAR COMMITMENT TO MAKE SURE THAT ONCE WE GET THROUGH THIS RECESSION WE'RE GOING TO BRING OUR RESOURCES AND COMMITMENTS MORE INTO BALANCE AND HAVE SUSTAINABLE DEFICITS THAT LEAVE OUR DEBT BURDEN AT A LOW AND STABLE LEVEL OVER TIME

LIESMAN: AT THE SAME TIME ONE OF AMERICA'S TOP CREDITORS CHINA HAS EXPRESSED ALOT OF CONCERNS ABOUT THAT HOW DO YOU UNDERSTAND THOSE COMMENTS ON THE ONE HAND IF THEY DON'T LIKE OUR PAPER THEY CAN SELL IT ON THE OTHER HAND THEY'RE SPENDING THE TIME TO SAY THINGS PUBLICALLY HOW DO YOU UNDERSTAND WHAT THEY ARE SAYING

GEITHNER: I THINK CHINA IS PLAYING A VERY IMPORTANT STABILIZING ROLE IN THIS FINANCIAL CRISIS WE ARE SEEING GLOBALLY THE THINGS THEY ARE DOING TO GET THEIR ECONOMY STRONGER TO ENCOURAGE DOMESTIC MAN GROWTH TO ALLOW FURTHER EVOLUTION IN THEIR BASIC FINANCIAL FRAMEWORK THOSE THINGS ARE VERY IMPORTANT CONSEQUENCIAL POLICIES AND WE'RE WORKING VERY VERY CLOSELY WITH THEM I THINK THEY HAVE A LOT OF CONFIDENCE IN THE POLICIES WE'RE PURSUING

LIESMAN: CHINA HAS A STIMULUS PACKAGE THAT'S ABOUT ON PAR WITH THE U.S. 4-5% OF GDP AND WE'RE ABOUT WHAT 6 OR 7% IT'S EUROPE THAT SEEMS TO BE LAGGING BEHIND ARE YOU CONCERNED EUROPE'S NOT DOING ENOUGH

GEITHNER: YOU KNOW MY SENSE STEVE AND I'VE BEEN SITTING AROUND THOSE TABLES FOR A LONG TIME I THINK THERE IS MORE COMMITMENT TO A GREATER LEVEL OF STIMULUS ACROSS THE MAJOR ECONOMIES NOW THAN WE'VE EVER SEEN MORE UNANIMITY ABOUT WHAT IT IS GOING TO TAKE MORE COMMITMENT TO DO WHAT IS NECESSARY AND YOU'RE SEEING VERY SUBSTANTIAL STIMULUS IN THE PIPELINE ACROSS THE MAJOR ECONOMIES

LIESMAN: SPEAKING OF EUROPE THE CZECH PRIME MINISTER THIS MORNING AND EU PRESIDENT SAID THE U.S. PLANS TO SPEND ITS WAY OUT OF RECESSION OUR QUOTE "A WAY TO HELL" HE SAID THE COST OF THE PLAN WILL UNDERMINE THE GLOBAL FINANCIAL MARKET YOUR COMMENT

GEITHNER: NO RISK IN THAT THE BEST THING WE CAN DO FOR THE WORLD ECONOMY THE BEST THING WE CAN DO FOR THE FORCES OF AMERICANS IS TO BE AGGRESSIVE IN USING THE RESOURCES OF THE GOVERNMENT TO GET THIS ECONOMY BACK ON TRACK OF COURSE WHEN WE GET A RECOVERY ESTABLISHED WE'RE GOING TO HAVE TO GET OURSELVES BACK TO THE POINT WHERE WE HAVE A SUSTAINABLE FISCAL POSITION AND WE'RE COMMITTED TO DO THAT AND I THINK THERE IS STRONG POLITICAL SUPPORT IN THE COUNTRY TO MAKE SURE WE'VE GOT MORE RESPONSIBLE FISCAL POLICIES GOING FORWARD

LIESMAN: MR SECRETARY DO YOU THINK YOU'RE AT A BETTER PLACE NOW YOU THINK THAN YOU WERE WHEN YOU FIRST STARTED 60 DAYS AGO

GEITHNER: STEVE WE'RE FACING DIFFICULT CHALLENGES WE HAVE TO MAKE SOME TOUGH JUDGEMENTS NOT EVERYONE IS GOING TO AGREE WITH THOSE JUDGEMENTS BUT WE HAVE NO CHOICE BUT TO ACT OUR STRATEGY IS GOING TO BE ACTION AND WE'RE GOING TO MAKE SURE WE'RE DOING WHAT IS NECESSARY TO GET OUR COUNTRY BACK ON A REASONABLE PATH

LIESMAN: MR SECRETARY THANKS FOR YOUR TIME





About CNBC:
CNBC is the recognized world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide, including more than 95 million households in the United States and Canada. The network's Business Day programming (weekdays from 5:00 a.m.-7:00 p.m. ET) is produced at CNBC's headquarters in Englewood Cliffs, N.J., and also includes reports from CNBC news bureaus worldwide. Additionally, CNBC viewers can manage their individual investment portfolios and gain additional in-depth information from on-air reports by accessing http://www.cnbc.com.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://nbcumv.com/cnbc/.