Saturday, 6 February 2016
Last updated 18 hours ago
Jan 22 2009 | 12:15pm ET
A second key member of President Barack Obama’s economic team is calling for a reconsideration of hedge fund registration. Timothy Geithner, Obama’s pick to be the next Treasury secretary, told the Senate Finance Committee that requiring registration would shine a light on the secretive industry.
“The financial crisis has highlighted the urgent need to overhaul the oversight of our financial system,” Geithner, current president of the Federal Reserve Bank of New York, said in written testimony. “With an objective of bringing greater transparency and oversight, I believe that we should consider requiring registration of hedge funds.”
Geithner testified before the committee yesterday, and it was set to consider his nomination this morning. He is expected to win approval both by the committee and the full Senate, despite the revelation that he failed to pay payroll taxes when he worked at the International Monetary Fund.
During his oral testimony, Geithner conceded that his supervision of Wall Street while head of the New York Fed “absolutely” could have been better. But he noted that he had worked to draw attention to hedge funds and some of the complicated, and unregulated, securities and financial instruments they use. In his own statement to the committee, Sen. Charles Schumer (D-N.Y.) pointed out that as early as September of 2006, Geithner was calling for increased regulation of hedge funds.
Obama’s pick to head the Securities and Exchange Commission, Mary Schapiro, has also called for revisiting the issue of hedge fund registration. The SEC imposed a registration requirement on hedge funds in 2005, but the rule was later struck down by a federal court.