Tim Geithner is a slick operator. His clear strategy coming into Wednesday's confirmation hearing was to express a great willingness to listen to the concerns of senators from both parties and to work with them going forward on whatever bee was in their bonnet. But whether agreeing with John Kerry that the "toxic assets" on the balance sheets of "zombie banks" are a serious problem or with Jim Bunning, R-Ky., that "currency manipulation" by China is a big issue, he rarely committed himself as to the specific details involved with implementing any particular policy.
Ultimately, responses on the order of "I am open to suggestions on how to accomplish that," repeated for the umpteenth time, are not very satisfying. If, for example, I was a Wall Street trader with one eye on CSPAN, looking for some hard data on exactly how the prospective Treasury nominee planned to fix the banking sector, I don't think I would have heard anything particularly confidence-building.
For example, when Maria Cantwell, D.-Wash., who is no dummy, asked him straight out if he supported full regulation of credit default swaps, his answer was very cautious: "I would support a careful look at a comprehensive regulatory framework ..." He acknowledged that innovation in exotic financial instruments generally outpaced the development of regulations designed for those instruments, and said he supported rejiggering the regulatory regime to help close that gap. But he declined to cite specific measures that could achieve that.
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