Despite assurances to the contrary, President Obama has personally asked Treasury Secretary Timothy Geithner to step down, sources told HousingWire early Wednesday morning. Geithner, who has seen a whipsaw of public opinion over his handling of bonuses at American International Group and the introduction of a so-called public-private investment program designed to clear bad assets off of bank balance sheets, has been the subject of strong criticism from Republicans and even a few prominent Democrats.
The stunning move comes after Geithner's popularity on Wall Street has gained momentum in the past week, as investors have largely cheered a proposal to see the Treasury, Federal Reserve, and FDIC partner with private investors to clear toxic assets off of of the hands of troubled banks.
"It's being done quietly, but the President has asked Geithner to step aside," said a source close to the Cabinet with knowledge of the decision. "He feels there is too much of a lack of trust, and he was frankly expecting more of a bounce in financial markets from the PPIP than what's been seen so far."
Geithner Out at the Treasury: Source [Housing Wire]