WASHINGTON (Reuters) – Timothy Geithner, the president of the New York Federal Reserve Bank, is expected to be tapped by President-elect Barack Obama to be the next secretary of the U.S. Treasury, NBC News and the Wall Street Journal reported on Friday.
NBC News said Obama was expected to announced his economic team on Monday in an effort to calm markets.
Geithner was considered a top prospect along with former Treasury Secretary Lawrence Summers for the Treasury post, which is in the forefront of efforts to tamp down the worst financial crisis since the Great Depression.
Geithner would take over from U.S. Treasury Secretary Henry Paulson, with whom he has been working hand-in-glove for months while dealing with a crisis that continues to wrack financial markets worldwide.
“This is an excellent choice. He knows where all the bones are buried on Wall Street,” said Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey.
Still a relatively youthful 47, Geithner already has a lengthy stint at Treasury under his belt. He joined the department in 1988 and worked his way up to under secretary for international affairs during the Clinton administration under former Treasury Secretary Robert Rubin and then under Summers, who succeeded Rubin as Treasury chief.
Investors gave his nomination an early endorsement.
Stock prices jumped higher within minutes of word flashing around the world that Geithner was expected to get the job — a key one in any administration but especially sensitive given the crisis that is hurting everyone from pensioners to Wall Street titans as their wealth melts away.
A New York Fed spokesman refused to comment on the reports that Geithner will be tapped for Treasury. His current job is also a highly sensitive one, since the New York Fed president is at the nexus of dealings between Wall Street and policy-makers at both the Treasury and the Fed, the U.S. central bank.
The head of the New York Fed also carries a permanent vote on the Fed’s interest rate-setting committee, which would make the selection of a successor to Geithner at the Fed also of great interest to financial markets.
(Reporting by Glenn Somerville; Editing by James Dalgleish)