It is quite a literary one. Neil Barofsky has a book where he talks about how he and the Treasury Secretary had it in for one another. As the Huffington Post wrap has it - edited for family friendliness - one meeting got so shouty that Barofsky thought Geither would "throttle" him:
"I said that I thought our capacity as a nation to deal with what could be a continuing financial crisis was being undermined by a loss of faith in government," Barofsky writes. "Then I said that the current loss of government credibility could be traced to Treasury's mishandling of TARP."
"Geithner got dramatic," Barofsky writes: "'Neil, you think I don't hear those criticisms? I hear them. And each one, they cut me,' he said, pausing and then making an emphatic cutting motion with one hand as he said 'like a knife.'"
"'No one has ever made the banks disclose the type of s--- that I made them disclose after the stress tests. No one! And now you're saying that I haven't been f---ing transparent?'"
But if you can't persuade them when you're in the government, at least you can make it look bad when they're out of it.
Only a month prior to the international meeting, Geithner had been shooting for a 6% capital ratio and putting pressure on Bair to concede.
He had "lobbied me intensely on lower numbers for the Basel III calibration, knowing full well that our healthy banks will be just fine with a high numbers, but of course Citi and BofA will get killed," Bair wrote in a memo after an Aug. 6 meeting with Geithner, which is cited in the book. "Why do we keep making banking policy to accommodate weak institutions? Keep hoping our relationship will improve, but this was a new low."
Ultimately, Bair sees the entire episode as a power play by Geithner. She argues he was trying to blow up the meeting between international regulators so that the issue would be kicked higher to the Group of 20 finance ministers who were set to meet in November. If the G-20 took over negotiations, Geithner would be leading the U.S., not Bernanke.
About this charge, Felix Salmon is pretty skeptical, and despite his apparent sensitivity to cutting criticism, Geithner can probably live with having his biggest enemies in the book-writing, rather than regulatory, business. One can only imagine what Elizabeth Warren's memoir will look like - and one may have to, if she becomes a senator.
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