Obama reiterates confidence in Geithner

President Barack Obama has "tremendous confidence" in Timothy Geithner, the US Treasury Secretary, even though he has spoken to executives from Citigroup, Goldman Sachs and other banks more than 80 times in his first seven months in office, the President's spokesman Robert Gibbs said last night

A Freedom of Information request by Associated Press revealed that Mr Geithner had spoken most often to Lloyd Blankfein, having met or spoken to the chief executive of Goldman Sachs more than 15 times between January and July - a revelation likely to fuel conspiracy theorists who believe that the bank has an undue influence on Government policy.

Associated Press speculated that Mr Geithner's closeness to the banks could be considered inappropriate given that his department oversaw the sector's bailout with billions of dollars of taxpayers' funds and plays a role in the banks' regulation.

Mr Gibbs said: "Secretary Geithner is somebody who has helped steer the financial sector back to stability and has worked on a range of issues and will be heavily involved in regulatory reform as we go forward."

Citigroup was the bank that had the most communication overall with the Treasury Secretary, usually via chairman Richard Parsons or chief executive Vikram Pandit.

The Government has a 34 per cent stake in Citigroup, which it bailout out with $45 billion, although President Obama has insisted that he does not want to take a hand in running the business.

Jamie Dimon, JPMorgan Chase's chief executive, talked regularly to Mr Geithner, as did Larry Fink, chief executive of BlackRock, the fund manager that runs one of the Treasury's public-private funds set up to buy toxic credit assets.

Bank of America, however, did not talk regularly to the Treasury Secretary, despite holding $45 billion in bailout funds. The bank is the subject of numerous investigations into its Government-sponsored takeover of Merrill Lynch last year.

- Via Times UK