Geithner’s Vague Threat to Banks: More Harm than Good?

U.S. Department of the TreasuryThe threat of regulatory action has hung over the banks for the last three years. The recent comment by Treasury Secretary Timothy Geithner  suggesting that the public should “stay tuned” could exacerbate the dark cloud hanging over our financial institutions, whether one feels they’ve paid their price or got off scot-free. Raising capital, buying insurance and recruiting new employees can all become harder when the threat of government action looms on the horizon.

I explored these ramifications more extensively in an article I just wrote for American Banker.  But I’d like to get your take on it:

  • Has the threat of impending suits caused you and/or your firm difficulty in any way?
  • Morale issues?
  • Do you feel the cost of capital has risen in direct response to the potential actions?
  • Or are you reassured by the Secretary’s comments and feel they may help get errant financial institutions back on track, finally building a firm foundation for saving. Lending, and growth?
  • What actions would you take as treasury secretary?

About Richard Magrann-Wells

Richard is a Executive Vice President with Willis Towers Watson’s Financial Institutions Group based in Los Angel…
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