Geithner: Financial Crises Caused by 'Stupidity and Greed'

Thursday, 26 Apr 2012 07:06 AM

 

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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.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

"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.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

© 2014 Thomson/Reuters. All rights reserved.

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