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Author(s):
Timothy Geithner
Published Date:
October 2017
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    Biography

    Timothy Geithner

    Timothy Geithner currently serves as President of Warburg Pincus and is a member of the firm’s Executive Management Group. Before joining Warburg Pincus, Mr. Geithner served as the 75th Secretary of the U.S. Department of the Treasury from 2009 to 2013. He previously served as President and Chief Executive Officer of the Federal Reserve Bank of New York from 2003 to 2009. He began his U.S. government career with the Treasury Department in 1988. Mr. Geithner chairs the Program on Financial Stability at the Yale University School of Management, where he is also a visiting lecturer. He is Chairman of the Board of Overseers of the International Rescue Committee. He serves on the Board of Directors of the Council on Foreign Relations. He is also a member of the Group of Thirty. Mr. Geithner holds a B.A. in government and Asian studies from Dartmouth College and an M.A. in international economics and East Asian studies from Johns Hopkins School of Advanced International Studies.

    The Per Jacobsson Lectures

    2016Are We Safer? The Case for Strengthening the Bagehot Arsenal. Lecture by Timothy F. Geithner.
    Reflections on Central Banking: What Is It All About? Lecture by Jacob Frenkel (Basel).
    2015Latin America: Outlook and Challenges Ahead. Panel discussion with Carmen M. Reinhart, Rodrigo Valdés, and Julio Velarde (Lima).
    2014The Federal Reserve and the Global Economy. Lecture by Stanley Fischer.
    Managing Financial Crisis in an Interconnected World: Anticipating the Mega–Tidal Waves. Lecture by Zeti Akhtar Aziz (Basel).
    2013Central Banking in the Crisis: Conceptual Convergence and Open Questions on Unconventional Monetary Policy. Lecture by Jean-Claude Trichet.
    2012China’s Monetary Policy Since the Turn of the Century. Lecture by Zhou Xiaochuan (Tokyo).
    Society, Economic Policies, and the Financial Sector. Lecture by Y. V. Reddy (Basel).
    2011The IMF and the International Monetary System: Lessons from the Crisis. Lecture by Axel A. Weber.
    What Financial System for the Twenty-First Century? Lecture by Andrew Crockett (Basel).
    2010Navigating the New Normal in Industrial Countries. Lecture by Mohamed A. El-Erian.
    Markets and Government Before, During, and After the 2007–20XX Crisis. Lecture by Tommaso Padoa-Schioppa (Basel).
    2009Growth After the Storm? A Longer-Run Perspective. Lecture by Kemal Dervis (Istanbul).
    2008The Role and Governance of the IMF: Further Reflections on Reform. Symposium panelists: Stanley Fischer, Trevor Manuel, Jean Pisani-Ferry, and Raghuram Rajan.
    The Approach to Macroeconomic Management: How It Has Evolved. Lecture by Lord George (Basel).
    2007Balance of Payments Imbalances. Lecture by Alan Greenspan.
    2006Asian Monetary Integration: Will It Ever Happen? Lecture by Tharman Shanmugaratnam (Singapore).
    Competition Policy and Monetary Policy: A Comparative Perspective. Lecture by Mario Monti (Bern).
    2005International Financial Institutions: Dealing with New Global Challenges. Lecture by Michel Camdessus.
    2004The U.S. Current Account Deficit and the Global Economy. Lecture by Lawrence H. Summers.
    Some New Directions for Financial Stability? Lecture by C.A.E. Goodhart, CBE (Zurich).
    2003The Arab World: Performance and Prospects. Lecture by Abdlatif Yousef Al-Hamad (Dubai).
    2002The Boom-Bust Capital Spending Cycle in the United States: Lessons Learned. Lecture by E. Gerald Corrigan.
    Recent Emerging Market Crises: What Have We Learned? Lecture by Guillermo Ortiz (Basel).
    2001No lecture took place due to the cancellation of the Annual Meetings of the IMF and the World Bank.
    2000Ten Years On—Some Lessons from the Transition. Lecture by Josef Tošovský (Prague).
    Strengthening the Resilience of Financial Systems. Symposium panelists: Peter B. Kenen, Arminio Fraga, and Jacques de Larosière (Lucerne).
    1999The Past and Future of European Integration—A Central Banker’s View. Lecture by Willem F. Duisenberg.
    1998Managing the International Economy in the Age of Globalization. Lecture by Peter D. Sutherland.
    1997Asian Monetary Cooperation. Lecture by Joseph C.K. Yam, CBE, JP (Hong Kong SAR).
    1996Financing Development in a World of Private Capital Flows: The Challenge for International Financial Institutions in Working with the Private Sector. Lecture by Jacques de Larosière.
    1995Economic Transformation: The Tasks Still Ahead. Symposium panelists: Jan Svejnar, Oleh Havrylyshyn, and Sergei K. Dubinin.
    1994Central Banking in Transition. Lecture by Baron Alexandre Lamfalussy (London).
    Capital Flows to Emerging Countries: Are They Sustainable? Lecture by Guillermo de la Dehesa (Madrid).
    1993Latin America: Economic and Social Transition to the Twenty-First Century. Lecture by Enrique V. Iglesias.
    1992A New Monetary Order for Europe. Lecture by Karl Otto Pöhl.
    1991The Road to European Monetary Union: Lessons from the Bretton Woods Regime. Lecture by Alexander K. Swoboda (Basel).
    Privatization: Financial Choices and Opportunities. Lecture by Amnuay Viravan (Bangkok).
    1990The Triumph of Central Banking? Lecture by Paul A. Volcker.
    1989Promoting Successful Adjustment: The Experience of Ghana. Lecture by J.L.S. Abbey.
    Economic Restructuring in New Zealand Since 1984. Lecture by David Caygill.
    1988The International Monetary System: The Next Twenty-Five Years. Symposium panelists: Sir Kit McMahon, Tommaso Padoa-Schioppa, and C. Fred Bergsten (Basel).
    1987Interdependence: Vulnerability and Opportunity. Lecture by Sylvia Ostry.
    1986The Emergence of Global Finance. Lecture by Yusuke Kashiwagi.
    1985Do We Know Where We’re Going? Lecture by Sir Jeremy Morse (Seoul).
    1984Economic Nationalism and International Interdependence: The Global Costs of National Choices. Lecture by Peter G. Peterson.
    1983Developing a New International Monetary System: A Long-Term View. Lecture by H. Johannes Witteveen.
    1982Monetary Policy: Finding a Place to Stand. Lecture by Gerald K. Bouey (Toronto).
    1981Central Banking with the Benefit of Hindsight. Lecture by Jelle Zijlstra; commentary by Albert Adomakoh.
    1980Reflections on the International Monetary System. Lecture by Guillaume Guindey; commentary by Charles A. Coombs (Basel).
    1979The Anguish of Central Banking. Lecture by Arthur F. Burns; commentaries by Milutin Ćirović and Jacques J. Polak (Belgrade).
    1978The International Capital Market and the International Monetary System. Lecture by Gabriel Hauge and Erik Hoffmeyer; commentary by Lord Roll of Ipsden.
    1977The International Monetary System in Operation. Lectures by Wilfried Guth and Sir Arthur Lewis.
    1976Why Banks Are Unpopular. Lecture by Guido Carli; commentary by Milton Gilbert (Basel).
    1975Emerging Arrangements in International Payments: Public and Private. Lecture by Alfred Hayes; commentaries by Khodadad Farmanfarmaian, Carlos Massad, and Claudio Segré.
    1974Steps to International Monetary Order. Lectures by Conrad J. Oort and Puey Ungphakorn; commentaries by Saburo Okita and William McChesney Martin (Tokyo).
    1973Inflation and the International Monetary System. Lecture by Otmar Emminger; commentaries by Adolfo Diz and János Fekete (Basel).
    1972The Monetary Crisis of 1971: The Lessons to Be Learned. Lecture by Henry C. Wallich; commentaries by C.J. Morse and I.G. Patel.
    1971International Capital Movements: Past, Present, Future. Lecture by Sir Eric Roll; commentaries by Henry H. Fowler and Wilfried Guth.
    1970Toward a World Central Bank? Lecture by William McChesney Martin; commentaries by Karl Blessing, Alfredo Machado Gómez, and Harry G. Johnson (Basel).
    1969The Role of Monetary Gold over the Next Ten Years. Lecture by Alexandre Lamfalussy; commentaries by Wilfrid Baumgartner, Guido Carli, and L.K. Jha.
    1968Central Banking and Economic Integration. Lecture by M.W. Holtrop; commentary by Lord Cromer (Stockholm).
    1967Economic Development: The Banking Aspects. Lecture by David Rockefeller; commentaries by Felipe Herrera and Shigeo Horie (Rio de Janeiro).
    1966The Role of the Central Banker Today. Lecture by Louis Rasminsky; commentaries by Donato Menichella, Stefano Siglienti, Marcus Wallenberg, and Franz Aschinger (Rome).
    1965The Balance Between Monetary Policy and Other Instruments of Economic Policy in a Modern Society. Lectures by C.D. Deshmukh and Robert V. Roosa.
    1964Economic Growth and Monetary Stability. Lectures by Maurice Frère and Rodrigo Gómez (Basel).

    The Per Jacobsson Lectures are available on the Internet at www.perjacobsson.org, which also contains further information on the Foundation. Copies of the Per Jacobsson Lectures may be acquired without charge from the Secretary. Unless otherwise indicated, the lectures were delivered in Washington, D.C.

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    Thank you to the following individuals for their thoughtful comments on the text: Andrew Metrick, Chase Ross, Ted Truman, Lee Sachs, Meg McConnell, Matt Kabaker, and Jake Siewert.

    PBS Frontline (1997), Interview with Rudi Dornbusch.

    See, for example, Gorton (2016), “The History and Economics of Safe Assets,” NBER Working Paper.

    Levine (2016), “Regulators Want to Slow Runs on Derivatives,” Bloomberg.

    Summers (2010), “Financial Stability: Retrospect and Prospect,” remarks at the Stanford Institute for Economic Policy Research.

    FDIC (2016), Bank Data & Statistics, Historical Statistics on Banking, Table CB14, “Liabilities and Equity Capital.”

    Bao, David, and Han (2015), “The Runnables,” FEDS Notes.

    For a time series of net repo funding to broker/dealers and banks based on flow of funds data, see Gorton and Metrick (2015), “Who Ran on Repo?” NBER Working Paper. See also Buehler, Noteboom, and Williams (2013), “Between Deluge and Drought: The Future of US Bank Liquidity and Funding,” McKinsey Working Papers on Risk.

    Baklanova, Copeland, and McCaughrin (2015), “Reference Guide to U.S. Repo and Securities Lending Markets,” Federal Reserve Bank of New York Staff Reports, Figure 9.

    “Capital requirements for banks are much higher, as are risk weights and the quality of bank capital. In all, new capital requirements are at least seven times the pre-crisis standards for most banks. For globally systemic banks, they are more than ten times.” Carney (2014), “The Future of Financial Reform.”

    FDIC (2016), Historical Statistics on Banking, Table CB14.

    IMF (2013), Global Financial Stability Report.

    For additional details, see Adrian and Ashcraft (2012), “Shadow Banking Regulation,” Federal Reserve Bank of New York Staff Reports.

    For example, Gorton, Lewellen, and Metrick (2012) show the components of safe assets changed over a 30-year time window, with bank deposits constituting 70 percent of the safe-asset share in the 1970s, but falling to 27 percent before the financial crisis as money market mutual funds, broker-dealer commercial paper, securitized debt from GSEs and other asset-backed securities (ABS) grew.

    Duca (2016) examines the linkage between higher capital requirements and the shadow bank share of short-term business credit in the U.S. over many decades. At a shorter horizon, Xie (2012) documents the increase of ABS/mortgage-backed securities (MBS) and asset-backed commercial paper (ABCP) issuance on a daily basis when expected convenience yield is high. Sunderam (2015) finds a similar phenomenon on a weekly basis, which suggests investors regard shadow bank debt as money-like.

    Sections 23A and 23B of the Federal Reserve Act “limit the risks to a bank from transactions between the bank and its affiliates and limit the ability of a bank to transfer to its affiliates the subsidy arising from the bank’s access to the Federal safety net.” Section 23A identifies eligible transactions between a bank and any single affiliate of the bank, and Section 23B requires that certain transactions between a bank and its affiliate occur on market terms. The Board of Governors of the Federal Reserve may waive these requirements, by a vote of the governors, if such an action would be in the public’s best interest. See Board of Governors of the Federal Reserve System (2003), “Adoption of Regulation W Implementing Sections 23A and 23B of the Federal Reserve Act.”

    Lenza, Pill, and Reichlin (2010) compare the Federal Reserve’s and European Central Bank’s (ECB’s) initial interventions during the global financial crisis in the context of their institutional design differences. With its foundation in the pre–Monetary Union period, the ECB could regularly transact with a wider set of counterparties and securities, which notably included ABS. Pre-crisis, almost 2,000 credit institutions could participate in weekly ECB operations, compared to the U.S. system with a few dozen primary dealers which participated in regular daily operations. As a result, the ECB’s main refinancing operations before the crisis averaged €300 billion, whereas the Fed’s routine refinancing operations averaged about $30 billion.

    See Labonte (2016) for a discussion of the notable changes to the Federal Reserve’s Section 13(3) authorities. Some of the most important changes: Section 13(3) assistance must now be broad based, meaning at least five eligible participants meet the eligibility requirements; provision of liquidity can only be to an “identifiable market or sector of the financial system”; assistance requires the approval of the Secretary of the Treasury; and information on borrowers must be provided to relevant congressional committees within seven days.

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