Crisis will happen again, but not like 2008: Geithner

Another crisis will happen again: Tim Geithner
Financial system more stable today: Tim Geithner
Yellen doing 'excellent' job: Tim Geithner

Former Treasury Secretary Tim Geithner said Thursday that a financial crisis will happen again at some point, but the structural reforms undertaken after 2008 can serve to mitigate the damage.

The U.S. economy now is a more stable, resilient, and stronger economy than before the 2008 financial crisis, Geithner said in an interview with CNBC's "Squawk Box." Even with the challenges in the U.S. economy, America is a "lucky country," he added.

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"People thought [in 2008] that we were going to have a Great Depression. People thought we might have hyperinflation. We thought we might turn into Greece," he said. Instead, he added, "the American economy is doing relatively well, making steady progress."

If a financial crisis does happen in the future, however, the Federal Reserve and the government would need to act again, he said. "The only way you protect people from the effects of classic panics is to have the central bank and the government step in and take the risks the market can't take."

The market reforms after 2008 put "much more capital into the system" and "much tougher rules on risk-taking," Geithner said. "They're strong enough, if they're not eroded, to buy this country a relatively long period of financial stability."

Geithner supported a strong dollar when he led the department. But he refused on Thursday to comment on the 18 percent rise in the dollar over the past 12 months against a basket of major currencies.

While the dollar has recently backed off its highs, a stronger U.S. currency makes goods sold by American companies overseas more expensive, which can put them at a pricing disadvantage to their foreign competitors.

The negative impact of that dynamic has shown up in corporate earnings in recent quarters.

Geithner was also asked to react to Fed Chair Janet Yellen's comments Wednesday that stock market valuations appear "quite high."

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"It's very hard to know what markets reflect at any given point in time. It's really hard to know, except in retrospect when market prices, valuations are defying gravity," he said.

"[Yellen] knows that. She's a very thoughtful, smart person," he said, but he refused to speculate why Yellen made those remarks.

"I can say she's doing an excellent job," he said.