On Friday President Elect Obama designated Tim Geithner to be the next Treasury Secretary and the stock market rose roughly 5 percent in minutes. Clearly, this was former Federal Reserve Chairman Paul Volcker’s choice and once again demonstrates Volcker’s influence as a beacon of integrity and competence. It also highlights Obama’s good judgement by seeking out and relying on the best advice, i.e. Volcker.
Geithner, top right, is a brilliant choice for many reasons, including the notion that he is a career public servant rather than just another investment banker seeking to expand their Rolodex prior to returning to Wall Street,
Equally important was the decision to safely distance Larry Summers, designated to lead the Council of Economic Advisors, from the key operational decisions that require the competence and grounding of someone like Geithner. Also critical was to exclude former Treasury Secretary Rubin, known as the Godfather of hedge funds within the industry.
Yet to be made is the critical decision regarding who will be the next Chairman of the Securities and Exchange Commission (SEC), a role only second in importance to the Treasury Secretary. What is clearly needed is an aggressive regulator focused upon restoring investor confidence.
