Treasury Secretary Timothy Geithner wants reform of corporate incentives, rather than capping executive pay. He said yesterday, during a Newsweek-sponsored luncheon, "I don't think our government should set caps on compensation," even for companies getting TARP money. He pointed out, "You had a crisis magnified by the fact that people were paid to take a huge amount of short-term risk. And that's something that's preventable...I think we can bring about broader reforms of compensation incentives in finance as a whole. We’ll make it much less likely that people get paid to take large amounts of short-term risk at the expense of their firm and the system as a whole." He suggested instead that the government require that compensation be tied into long-term performance. more ›

Treasury Secretary Timothy Geithner gave a few details about the Treasury's draft bill giving it "unprecedented emergency powers to wind down faltering nonbank firms such as American International Group Inc.," the Wall Street Journal reports. more ›

While Treasury Secretary Timothy Geithner says the U.S. government is demanding that the AIG pay back extravagant bonuses, some suggest he should have known about the "retention compensation" since he was NY Federal Reserve chairman when the government bailed out the insurer. Senator Christopher Dodd even said that the Treasury forced him to add language to the stimulus bill that created a loophole preserving the bonuses. The NY Times's feature on Geithner calls this a "defining moment," reporting how he works 15 hour days and that he's doing of work "without the usual complement of Treasury assistants because of administration delays in vetting potential nominees — a consequence in part of its efforts to avoid embarrassments like the disclosures of Mr. Geithner’s past tax lapses." Political consultant Joe Trippi tells Politico that Geithner needs to fight back or else, "Some of this anger that is dissipated when it is aimed at AIG or Treasury could start to take a toll on the president and the White House." more ›