The next Treasury chief also may have a new opposite number at the Fed before too long. Bernanke’s second term as chairman ends in January 2014 and the chances his staying on “are quite low,” according to former Fed Vice Chairman Donald Kohn, a 40- year veteran of the central bank. As he did with Geithner, Obama may consult Lew about who should be Fed chairman.
Dodd-Frank
Geithner is leaving Treasury at a time when some of the rule-making set out in the 2010 Dodd-Frank financial overhaul legislation has yet to be completed. Regulators still are working on writing provisions, including a proprietary-trading ban advocated by Volcker that’s intended to reduce the chance banks will risk depositors’ money.
The Fed’s Tarullo also is pushing an agenda to regulate banks beyond the restraints in the law, including making them fund more of their assets using long-term borrowing.
Lew himself has said that regulation isn’t his strongest suit. In an appearance before the Senate Budget Committee in 2010, he was asked by Senator Bernie Sanders, a Vermont independent, whether deregulation of Wall Street contributed to the economic crisis.
Lew said he didn’t believe it was the “proximate cause,” then added, “I would defer to others who are more expert about the industry to try and parse it better than that.”