Geithner and Bernanke Amid the Global Financial Crisis

28 Pages Posted: 7 Apr 2010

See all articles by Francis E. Warnock

Francis E. Warnock

University of Virginia - Darden Business School; National Bureau of Economic Research (NBER)


In mid-February 2009, amid the global financial crisis, the news was grim. The U.S. economy had been in recession since December 2007. If the downturn lasted into early spring, it would become America's longest postwar recession. The economy had shed 3.5 million jobs over the previous 12 months, the worst 12-month period on record. Bank lending was plummeting; the few banks with funds available were holding onto them. With this massive shift into liquid assets (cash and cash equivalents) and away from lending of any sort (even for productive uses or, in many cases, the working capital firms needed to survive), the economy would likely grind to a halt. On this brisk mid-February day in Washington, Timothy Geithner and Ben Bernanke rolled up their sleeves and reevaluated their plans to address the nearly impossible task of righting the ship. In terms of monetary and fiscal policy, were they doing all they could to halt this epic slide? Were they doing too much?



November 10, 2009

Geithner and Bernanke AMID THE Global Financial Crisis

Valentine's Day 2009 had just passed, and the financial crisis that had gripped the country for the past year and a half was threatening to put a quick end to the American public's honeymoon with President Obama. The crisis, and the Obama administration's response to it, had the potential to determine whether the Obama presidency would be a success.

When it came to the course of U.S. economic policy, two of the top decision-makers were Tim Geithner and Ben Bernanke. Treasury Secretary Geithner and Federal Reserve (Fed) Chairman Bernanke had the eyes of the world on them as they sought policies to help get the United States—and the world—through the mess that began as a financial crisis and had morphed into a full-fledged recession and, potentially, a severe depression.

In this time of crisis, at least one thing was certain: Geithner and Bernanke would not require time to get to know one another. Indeed, they had been working closely together since November 2003, when Geithner became president of the Federal Reserve Bank of New York (FRBNY), the branch that is the Fed's primary connection to financial and credit markets (and the large banks that reside in the New York district). Since then, except for a brief period in late 2005 when Bernanke served as head of the Council of Economic Advisors, Bernanke and Geithner had served together on the Federal Open Market Committee (FOMC), the committee that sets U.S. monetary policy. Throughout this crisis, they had been in continuous contact; Bernanke (at times almost daily, it seemed) was implementing new, nonstandard policies, and Geithner, from his previous post as head of the FRBNY, was gauging the impact on credit markets.

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Keywords: global financial crisis, monetary policy, fiscal policy

Suggested Citation

Warnock, Francis E., Geithner and Bernanke Amid the Global Financial Crisis. Darden Case No. UVA-BP-0540, Available at SSRN:

Francis E. Warnock (Contact Author)

University of Virginia - Darden Business School ( email )

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National Bureau of Economic Research (NBER) ( email )

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