Geithner Ally
In February 2009, Bernanke took Geithner’s side when the Treasury secretary was fighting calls for the government to take over large, ailing banks -- a step that Bernanke’s predecessor, Alan Greenspan, suggested might be necessary.
Geithner’s alternative, dreamed up on a beach in Mexico while he was between his New York Fed and Treasury jobs, was to put the biggest banks through Fed stress tests before forcing them to take on more capital.
Later that year, Obama, advised by Geithner, nominated Bernanke to his second four-year term as Fed chairman.
The Geithner-Bernanke alliance was further cemented during the year-long debate over financial reforms, which Obama signed into law in July 2010. Led by Geithner, the administration fought off congressional efforts on Capitol Hill to rein in the central bank’s independence.
Audit-the-Fed
“He helped defend the Fed against some of the excesses that were thrown around on the Hill like the audit-the-Fed movement,” said Fratto, a partner at Hamilton Place Strategies, a policy and communications consulting firm in Washington.
The 59-year-old Bernanke said in 2010 that he and Geithner had “a lot of mutual trust.”
The Fed chairman doesn’t have anything like that close a relationship with Lew. His daybook shows that he hasn’t had a meeting at his office with Lew since at least November 2010, when the budget maven took over OMB.
Lew, though, should be able to build a strong rapport with Bernanke because the interests of the two institutions are intertwined, Fratto said.