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Commentary By Nicole Gelinas

An End to the Inside Job?

Mr. Lew, you held a top position at Citigroup from 2006 through 2008, the years when nation’s financial industry was careening toward crisis. In his recent book, "Bailout," Neil Barofsky, the former special inspector general of the government’s bank bailout program, writes that the "allure" of a high-paying private-sector job "is a powerful and pernicious force in government service, especially … in agencies that deal with Wall Street." You surely remember that the former Clinton-era Treasury secretary, Robert Rubin, also landed at Citigroup. Is the revolving door between Washington and Wall Street a serious problem, and if so, what would you do about it in your agency?

If Citigroup were to fail tomorrow, can you say with confidence that you could counsel the Obama administration to allow Citigroup’s bondholders and other creditors, including derivatives counterparties, to take its losses in the marketplace, without a bailout? If not, in what circumstances wouldn’t this course be the best route?

More than two years after President Obama signed the Dodd-Frank financial reform bill into law, critics on the left and right have said it falls far short of fixing problems with the financial system. Derivatives rules, for example, are still not finalized, and there is no certainty on what would happen if a large insurance company like AIG failed, or is there? Do you think Dodd-Frank needs to be strengthened?

In the past few months, Spain and Italy have taken extraordinary steps to use taxpayer money to bail out investors in private banks. Does the U.S. government encourage such bailout policy or discourage it? If the former, is there a danger that Europe and the rest of the West would expect the U.S. to bail out its banks and other large financial institutions in a future crisis, just as Europe is doing now?

The Obama White House has done little to pressure mortgage servicers to reduce the amount that "underwater" homeowners owe on their home loans. Do you think it was fair for the U.S. government to bail out mortgage lenders and investors but not borrowers?

This piece originally appeared in The New York Times

This piece originally appeared in The New York Times