Any good reason for Sg Minister Much More Well Paid Than US Treasury Secretary?

[makapaaa]

Obama Said to Pick Geithner as Treasury Secretary (Update3)
2008-11-21 22:16:07.200 GMT


(Adds investor comment in sixth paragraph and context on
Summers, Geithner, economy from 17th paragraph.)

By Rich Miller and Michael McKee
Nov. 21 (Bloomberg) -- President-elect Barack Obama picked
Timothy Geithner, head of the Federal Reserve Bank of New York,
to be his Treasury secretary, with Lawrence Summers getting a
senior White House role, a Democratic aide said.
Obama is also likely to nominate New Mexico Governor Bill
Richardson as Commerce Secretary, and to announce his picks on
Nov. 24, the person said on condition of anonymity.
Geithner has helped lead U.S. efforts to combat the deepest
financial crisis in seven decades, helping oversee the decisions
this year to take over American International Group Inc., rescue
Bear Stearns Cos. and leave Lehman Brothers Holdings Inc. to
fail. Summers was Bill Clinton’s last Treasury secretary, and is
now a professor at Harvard University.
Both Geithner and Summers are veterans of managing financial
turmoil, having worked together on the Asian financial crisis of
1997-98 and helping prevent a Mexican default earlier that
decade. They will be charged with shepherding Obama’s plans for a
fiscal stimulus to cushion an economy that analysts say is in its
deepest recession in a quarter century.
Stocks rallied after news of Obama’s Treasury choice, with
the Standard & Poor’s 500 Stock index rising 6.3 percent to
800.03 at the close in New York. The index is still heading for
its biggest annual decline since 1931.

‘Resounding Yes’

“It’s a resounding ‘yes’ from Wall Street,” said Peter
Kenny, managing director for institutional sales at Knight Equity
Markets in Jersey City, New Jersey. “There’s confidence in a
person who is up and coming and recognized as an authority on a
very complex problem. There’s confidence in what he’s displayed
so far, in terms of his leadership and management skill.”
Geithner, 47, served as an undersecretary for international
affairs under Summers, 53, and has been at the helm of the New
York Fed since November 2003.
Kevin Warsh, a Fed Board governor, is a leading contender to
succeed Geithner at the New York Fed, a U.S. official said on
condition of anonymity.
Obama’s nominations would need to be confirmed by the Senate
after he takes office on Jan. 20. President George W. Bush’s
Treasury secretary, Henry Paulson, has pledged to work with his
successor during the transition. Summers, along with former Fed
Chairman Paul Volcker, were cited as candidates for the Treasury
job by people close to the Obama camp earlier this month.
As head of the New York Fed, Geithner has served as the
central bank’s top liaison with Wall Street. Geithner oversaw
meetings at his bank to attempt to head off Lehman’s failure in
September, later hosting gatherings on how to resolve AIG.

 

[makapaaa]

Washington Veteran

Geithner is no stranger to Washington or the Treasury.
Before taking over the New York Fed in 2003, he spent most of the
previous 18 years working in the nation’s capital, first at
Kissinger Associates, then at the Treasury and finally at the
International Monetary Fund.
Over that time, Geithner earned what his one-time mentor
Summers called a “doctorate in financial policy.” He also
developed a skill-set his supporters say makes him well suited
for his new job: calmness under pressure, an ability to see many
sides of a problem and a sense of the politically possible.
“During the Mexico crisis, some of us would occasionally be
emotional about something,” said Jeffrey Shafer, who served with
Geithner at the Treasury from 1993 to 1997 and who is now Vice
Chairman of Global Banking for Citigroup Inc. in New York. “Tim
was the calm guy in the room who made sure we looked at all sides
of the issue.”

Asian Interests

Geithner, who has studied Japanese and Chinese and has a
Master of Arts in international economics from Johns Hopkins
University, also played a key role in the Treasury’s dealings
with the Finance Ministry in Tokyo. He was less inclined to
intervene in currency markets than some other officials at the
time, according to Shafer.
Dino Kos, a former New York Fed official, described Geithner
as a “pragmatist, not an ideologue” who has a good sense of the
political dynamics in Washington and the need to keep lawmakers
in the loop about what’s going on. That’s been especially
important in the current crisis as the Fed has taken
extraordinary actions to limit the financial fallout, including
its rescue of insurer AIG in September.
“If you’re going to push the envelope -- as the Fed has
been doing -- you need to keep legislators informed about what
you’re doing and why you’re doing it,” said Kos, who’s now a
managing director at Portales Partners in New York.
Summers, an adviser to Obama during the campaign, earlier
this week urged a fiscal stimulus package big enough to spur the
economy for the next two to three years.

Economic Slump

The U.S. economy shrank at an annual rate of 0.3 percent in
the third quarter, and economists surveyed by Bloomberg News
anticipate the longest contraction since 1974-75.
The next Treasury secretary will have unprecedented powers,
in charge of overseeing a $700 billion rescue program that was
enacted last month and designed to prevent a financial collapse.
Paulson has allocated $250 billion to buying stakes in banks, and
used another $40 billion for AIG.
Geithner would also inherit a record budget deficit. The
bond dealers that advise the Treasury this month forecast a $988
billion shortfall for the financial year ending in September
2009. Paulson this week said the government will issue $1.5
trillion of debt.
Summers said Nov. 17 at a forum in Washington with Paulson
and former Treasury Secretary Robert Rubin that ballooning debt
isn’t a major issue for now because there’s “excess demand” for
Treasuries rather than excess supply, as investors flock to
government debt as a haven.

‘Two Fronts’

“The next secretary is going to have to be a crisis manager
and plan for the future,” Rubin, who preceded Summers at the
Treasury, said in an interview before today’s news. “He’ll have
to operate on two fronts at the same time.”
As president of the New York Fed, Geithner has enjoyed a
special status at the central bank. He is vice chairman of the
Federal Open Market Committee that convenes regularly to decide
on interest rates. He votes at every FOMC meeting, unlike the
presidents of the Fed’s other 11 member banks.
The institution he’s led makes almost daily transactions
with Wall Street securities dealers to keep interest rates in
line with the Fed’s target and is the conduit for the Treasury’s
rare forays in foreign-exchange markets.
When Geithner was first tapped to take over the New York Fed
five years ago, it was bit of a surprise. The boyish-looking
technocrat lacked the stature of some of his predecessors --
including E. Gerald Corrigan, now with Goldman Sachs Group Inc.,
and Volcker, who ran the New York Fed before becoming chairman of
the Federal Reserve Board in 1979.

 

[makapaaa]

‘Gravitas’ Question

“He was very young and he speaks very softly,” said
Blackstone Group LP co-founder Peter G. Peterson, who headed the
search team that chose Geithner. “The question was, ‘Does he
have the gravitas, the strength and the personality to make the
tough decisions?’” The answer, he added, turned out to be yes.
Geithner spotted potential problems in the more than $47
trillion credit-derivatives market early on in his tenure at the
New York Fed and began pressing banks in 2005 to reduce trading
backlogs that could prove dangerous should a crisis hit.
He also warned that year that Fannie Mae and Freddie Mac
needed more capital to offset the risks that they were taking in
the mortgage market. They’ve since been taken over by the
government after being ruled insolvent by their regulator.
Paulson said yesterday it will be up to the Obama administration
to decide the future of the two companies, which account for more
than half of U.S. home-loan financing.

Fed Criticism

Some experts, including monetary economist Anna Schwartz,
have condemned the Fed for putting $29 billion of its balance
sheet on the line to back the takeover of Bear Stearns by
JPMorgan Chase & Co. in March. Geithner in particular has been
singled out, amid accusations that his time at the Treasury made
him more prone to government interference in the economy.
Others, including University of California at Berkeley
professor Barry Eichengreen, have faulted the Fed and Treasury
for failing to prevent the bankruptcy of Lehman that triggered
renewed turmoil in the markets in September.
In his new position as Obama’s Treasury Secretary, it will
be up to Geithner to spell out the administration’s financial and
economic policies to the public. It’s not a role he is used to
playing.
“Moving into that office would involve an adjustment to
being more in the public eye, to being the guy on the firing
line,” Kos said, though he noted that Geithner has gotten a
flavor of that over the past year as New York Fed chief.
It will also fall to Geithner to take the lead in revamping
financial services regulation in the wake of the market meltdown
of the past year.
“The crisis exposed very significant problems in the
financial systems of the U.S. and some other major economies,”
Geithner said in a June 9 speech in New York. “We can do better,
and I am reasonably confident we will.”

For Related News:
For news on the economy: STNI USRECESSION <GO>
For news on Obama: BIO BARACK OBAMA <GO>
For news on Geithner: BIO TIMOTHY GEITHNER <GO>

--Editors: Chris Anstey, Daniel Moss

To contact the reporter on this story:
Rich Miller in Washington at +1-202-624-1937 or
[email protected]

To contact the editor responsible for this story:
Chris Anstey at +1-202-624-1972 or
[email protected]

 

[makapaaa]

I also made tough decisions like raising GST, putting hum in mee siam, praying with onions and chillies during F1, etc. what! *hee*hee*​

 

[Leegimeremover]

Because of sheer corruption? Whose job is more difficult, stopping a global financial tsunami, or taxing the citizens to balance the P&L accounts? You think Singaporeans like you goondu one ah?

 

[myfoot123]

Only 3 words can best describe our ministers: GREED BEYOND RECONGINATION . Sad for this country and its people.

 

[DIVISION1]

I thought this has been explained before. Singapore pays salaries for our civil servants benchmarked to the private sector to attract and keep vital talents for the nation!

 

[makapaaa]

I thought this has been explained before. Singapore pays salaries for our civil servants benchmarked to the private sector to attract and keep vital talents for the nation!