WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner said on Wednesday he would consider forcing out chief executives of banks that receive government bailouts if they were not managing their businesses properly.
In an interview with CBS, Geithner said economic recovery depends on a financial system that effectively provides credit, and the government would hold companies receiving public aid accountable.
When asked whether he left open the option to pressure a bank CEO to resign, Geithner responded, “Of course. Of course.”
The comment came just days after the chief executive of General Motors Corp was ousted at the request of President Barack Obama’s auto task force.
The White House has been trying to strike the right balance between salvaging firms that are vital to the economy and acknowledging taxpayer resentment over a series of increasingly costly bailouts.
The fact that many companies continued to pay large bonuses and sponsor lavish corporate events after accepting public money has infuriated voters and politicians alike, and Geithner in particular has been criticized for not imposing strict limits on how companies use government money.
In separate interviews with ABC and NBC, Geithner noted that the government has pushed out executives of bailed out companies before.
“Where the government has ... had to take exceptional action, the government has come in and changed management and boards so that these firms can emerge stronger,” he told NBC news. “Where we have to do important things to provide assistance, we’re going to make sure we do so on terms that protect the taxpayer and have these firms emerge stronger.”
Reporting by Emily Kaiser; Editing by Leslie Adler