Timothy Geithner was finally sworn in Monday as our new Treasury Secretary. While the Senate delayed his confirmation, we learned that Citigroup - one of the many banks we taxpayers bailed out this past November - took ownership of a $50 million corporate jet. Well, yesterday the two stories merged. Geithner told Citi no.
Mr Geithner used his first day in office to unveil rules intended to make more transparent decisions over how much capital to inject into each bank under the Tarp, and to insulate these decisions from the influence of politicians and lobbyists.
The rules and the intervention over the Citi jet – which sets a new tone in the relationship between the government and banks – are intended to reassure a sceptical public that Tarp funds will not be misused.
Some Washington officials say they are amazed by the financial sector’s tin ear to public sentiment at a time when it is heavily reliant on government aid.
Asked about the Citi jet purchase, Robert Gibbs, White House spokesman, said President Barack Obama “does not believe that is the best use of money at this point. That money should be used to lend to consumers”.
People close to Citi said the troubled bank could end up paying around $4m to cancel the order for the jet – believed to be a Falcon 7X made by France’s Dassault – unless it can find a buyer for the aircraft.
2 hours ago