Geithner backs crisis bailouts

Tim Wallace
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A FORMER US treasury secretary has defended the country’s giant bank bailouts at the height of the financial crisis in a new book published this week.

Tim Geithner has taken a beating over the past years for appearing too close to banks after he took the job in 2009. But in his book, Stress Test, he argues the taxpayer got a good deal and has turned a profit of hundreds of billions of dollars on the bailouts.

Geithner even argues the US should have done more, including bailing out Lehman Brothers instead of letting it go bust in the autumn of 2008, shortly before he took over.

He also defends other tough decisions, including letting the bailed-out insurer AIG pay its staff bonuses, arguing that the consequences would have been even worse.

However, Geithner does admit some mistakes, including that he failed to make sure banks were more resilient during his time as a regulator at the New York Fed.

The ex-treasury secretary also goes into detail on disagreements between himself and his former mentor Larry Summers, as well as the strain the crisis put on his young family.