WASHINGTON — The expected choice of Timothy Geithner as the next Treasury secretary won rare unanimity from industry participants last week, with free-market conservatives, policy wonks, and consumer activists praising the selection.
They cited his five-year tenure as president of the Federal Reserve Bank of New York, his direct style in dealing with Congress, and the key role he has already played in the government's reaction to the financial crisis.
"He's a very strong choice for some very specific reasons," said Randal Quarles, managing partner of Carlyle Group and a former Treasury undersecretary in the Bush administration. "He has a wealth of experience at the Treasury and Federal Reserve. He's been intimately involved in dealing with the financial crisis. And before the financial crisis he was very thoughtful and involved in trying to reduce some specific risks in the system."
Wall Street was clearly pleased by the news. The Dow Jones industrial average jumped more than 500 points after rumors of Mr. Geithner's appointment surfaced Friday.
Peter Wallison, a fellow at the American Enterprise Institute and a Treasury official in the Reagan administration, said Mr. Geithner met the most important qualification for a Treasury secretary: understanding the markets.
"Tim Geithner has been immersed in the financial markets in more than an academic sense for many years, and should bring as much necessary understanding to the job as anyone," Mr. Wallison said. "My only concern is that he is young and has grown up in a bureaucratic environment in which political superiors called the shots. If he's going to be effective, he has to have the strength of personality to be an independent voice, in a way he has not been in the past."
Despite Mr. Geithner's key role in the government's rescue plans to date, consumer groups said they think the New York Fed official understands the importance of preventing more foreclosures — a key item they argue is needed to stem fallout in the economy.
"We think it's an excellent choice," said Mike Calhoun the president of the Center for Responsible Lending. "Based on what we know, we think he'll make keeping homeowners in their homes a priority."
Sources said President-elect Barack Obama could name Mr. Geithner as his nominee as early as today.
Though the majority of observers said Mr. Geithner's pick was a good one, not everyone agreed.
Joe Mason, a professor at Drexel University, said Mr. Geithner was too connected to some of the government's policies to date. What was needed was fresh blood, he said.
"We're in for more of the same. We need something different. The same old hasn't worked and it's not going to work," Prof. Mason said. "He's also not an economist and does not have the thinking necessary to be effective in the midst of an economic crisis."
But Mr. Geithner has already stood out from his colleagues during the financial crisis. At a Senate Banking Committee hearing in April defending the rescue of Bear Stearns, Mr. Geithner was seen as straightforward in replying to questions from lawmakers, in contrast to Federal Reserve Board Chairman Ben Bernanke and Treasury Secretary Henry Paulson.
"The Senate loves him. When testifying with Bernanke and Paulson, Geithner was the only one to give clear, direct answers," said Chris Low, the chief economist at First Horizon National Corp.'s FTN Financial Capital Markets.
Mr. Geithner said the Bear rescue was necessary to prevent economic collapse. He also played a key role in setting up the liquidity programs to backstop the investment banking industry, money market mutual funds, and the commercial paper market.
Mr. Geithner has extensive experience in the financial services industry. He joined the Treasury Department in 1988 and was undersecretary for international affairs from 1999 to 2001.
He was director of the policy development and review department at the International Monetary Fund from 2001 to 2003.
His role in previous crisis should also help him, observers said.
"Geithner goes back to the Korean financial crisis. It would be hard to find anyone in government who has helped resolve more financial crises than he has," said Jaret Seiberg, an analyst with Stanford Research Group. "This is the choice the market wanted. He understands how to handle a crisis, which is just what the economy needs at this point."
Wayne Abernathy, an executive vice president with the American Bankers Association and a former Treasury official, said Mr. Geithner would be one of the few Treasury secretaries in recent memory with a direct understanding of the banking system. "The banking industry is the core on which you are going to rebuild the economy," Mr. Abernathy said.