The Call Tim Geithner Didn’t Make While His New York Fed Watched Over Citigroup (ProPublica Reports)
Apr 10, 2010 at 12:05 PM
DailyBail in Citigroup, citigroup, geithner, geithner, ny fed

Tim Geithner

Chalk up another failure at the hands of then NY Fed President Tim Geithner.

There appears to be a factual error with the story.  In the final paragraph the author states Citigroup received $45 billion in TARP funds and $7 billion in additional guarantees.  He was only off by $302 billion.  The FDIC debt guarantee granted Citigroup (that essentially saved the company), when the stock was teetering below $1, was originally for $309 billion.


See also:

Citigroup Bailout Details: Geithner Offers The Shaft To The Sheeple


Ritholtz: TARP Was An Elaborate Ruse To Bailout Citigroup (Video)

Taxpayers Tell Citigroup To Suck It -- Pandit Complies

Citigroup Sells $1 Billion Of Paper Without An FDIC Assist (Comedy Video)


Reprinted with permission

From ProPublica

By Jeff Gerth

The proposition that Treasury Secretary Timothy Geithner, in his prior job as president of the Federal Reserve Bank of New York, didn’t do enough to rein in banking giant Citigroup just gained new support.

On Wednesday, the Financial Crisis Inquiry Commission disclosed that a peer review  study by other Federal Reserve banks in 2005 found that the New York Fed “had insufficient resources to conduct supervisory activities” of Citigroup.

Geithner, who led the New York Fed from 2003-2009, did not seek additional resources in the wake of the study, according to testimony before the commission on Wednesday by Alan Greenspan, who was chairman of the Federal Reserve at the time.

We’ve reported earlier  on Geithner’s extensive contacts with Citigroup officials during his tenure at the New York Fed. In the end, the Federal Reserve was unable to curb practices that led Citigroup to the brink of collapse in 2008 and required a massive federal bailout.

Greenspan said Wednesday that if the New York Fed had not had the resources to do its job, Geithner would have been been on the phone quickly to complain. “No such telephone call or any other communication ever existed,” he testified.

Geithner’s supervision of Citigroup figured in his confirmation hearings to become Treasury secretary. He acknowledged, under questioning, he could have done a better job supervising Citigroup.

A few senators cited Geithner’s handling of Citigroup as a basis for their opposition to his confirmation after ProPublica disclosed that the New York Fed had lifted some restrictions against Citigroup and allowed it to engage in risky ventures with insufficient capital during Geithner’s tenure.

Two months after Geithner’s confirmation, the Government Accountability Office weighed in on the Fed’s handling of Citigroup and other large banking companies. The GAO said the Fed, having uncovered deficiencies in risk-management practices at the largest banking firms in 2006, “did not take forceful action” to correct them “until the crisis occurred.”

The Fed brought no formal enforcement actions against any large institution for substandard risk-management practices before the crisis erupted in the second half of 2007. Nor did it use its confidential process during that period to downgrade any large bank company’s risk rating, according to two people familiar with the process, a step that could have triggered costly consequences for the firms.

The Citigroup bailout required $45 billion in capital and $7 billion in guarantees. Now, whether to give the Fed more power to regulate large financial institutions like Citigroup is a key issue for Congress as it debates legislation to reform the regulatory system.


Write to Jeff Gerth at


Article originally appeared on The Daily Bail (
See website for complete article licensing information.