Financial crises caused by "stupidity and greed": Geithner

PORTLAND, Oregon Wed Apr 25, 2012 8:52pm EDT

U.S. Treasury Secretary Timothy Geithner speaks during an event to commemorate Holocaust victims and survivors in the Capitol Rotunda in Washington April 19, 2012. REUTERS/Benjamin Myers

U.S. Treasury Secretary Timothy Geithner speaks during an event to commemorate Holocaust victims and survivors in the Capitol Rotunda in Washington April 19, 2012.

Credit: Reuters/Benjamin Myers

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PORTLAND, Oregon (Reuters) - Treasury Secretary Timothy Geithner sought on Wednesday to reassure Americans that the Obama administration was doing what it could to rout out the bad actors from the worst financial crisis since the Great Depression.

"The wheels of justice are turning now," Geithner said at an event in Portland after touring a factory there. "They are not turning as fast as people would like, but we have the best system in the world for making sure we can enforce the laws of the land," he said.

Geithner suggested that holding people accountable for the wreckage caused by the recent housing collapse and the ensuing financial meltdown was not that simple since most crises were not caused by criminal activity.

"Most financial crises are caused by a mix of stupidity and greed and recklessness and risk-taking and hope," said Geithner, who helped tackle the crisis for the Bush administration when he was the head of the New York Federal Reserve and has been urging Europe to act more aggressively to contain its debt problems.

"You can't legislate away stupidity and risk-taking and greed and recklessness. What you can do is make sure when it happens it does not cause too much damage and to do that you have to make sure you have good rules against fraud and abuse, better protections and you force banks to hold more capital against their risk," he said.

Although civil charges have been filed against some of the biggest Wall Street banks in connection with the financial crisis, no household names have gone to jail.

At the event, Geithner shot down reports that he was interested in becoming the president of Dartmouth College, his alma mater. Geithner did not elaborate on his future except to reiterate that he planned on staying until the end of the Obama administration's first term.

(Reporting By Rachelle Younglai, Doug Palmer and Teresa Carson; Editing by Eric Beech)

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Comments (6)
LillithMc wrote:
There was more than “stupidity and greed” in Wall Street behavior. “Fraud and abuse” were rampant. Geithner was working as a regulator at the time. Look in the mirror, Geithner.

Apr 26, 2012 10:45am EDT  --  Report as abuse
Whittier5 wrote:
Yes, Timothy, tell us something about the Big Banks & Brokerages that we don’t know.

If something “is being done” about the “bad actors”, who caused this 3rd Great Depression in 105 years, then

Why haven’t any of the Big Banks been Nationalized and broken up??

Apr 26, 2012 10:50am EDT  --  Report as abuse
The Treasury Secretary Timothy Geithner is telling a half truth, when he says the Obama Administration is doing everything it ca to
“rout out bad actors”, I have yet to see anyone from Fannie Mae, or
Freddie Mac, called out for their criminal actions, not called to the stand for what they did in all of this mess.
At this point I ask, Should Fannie and Freddie even exist, from now on?

Apr 26, 2012 10:57am EDT  --  Report as abuse
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