THE BASIS POINT

Volcker Says Banks Need $3t, Geithner Confirmation Thursday

Treasury Secretary nominee Tim Geithner is in confirmation hearings today with a vote set for tomorrow to see if he will be confirmed as Treasury Secretary. The big issue is that Geithner was late on $34,000 in self-prepared taxes. Thankfully lawmakers know the bigger issues are billions in market losses, and as former Fed chairman and current White House senior economic adviser Paul Volcker pointed out—as much as $3 trillion in bank losses forthcoming.

At this point it seems unlikely Geithner’s late taxes will bar him from taking a post he’s eminently qualified for. As for his plans, he said a bank rescue package is due in the next couple weeks. The plan will likely involve a $3t ‘bad bank’ proposal and also using the remaining $350b of TARP funds as soon as possible.