Former U.S. Treasury Secretary Timothy Geithner is preparing to borrow from JPMorgan Chase & Co. to help fund his new career in private equity.
Geithner, 54, secured a credit line with JPMorgan, one of the largest banks he oversaw during the financial crisis, to finance personal investments in funds started by his current employer, Warburg Pincus, according to a filing with the New York Department of State. He is borrowing money to invest in a $12 billion private equity fund that the firm raised in November, its first main fund since he joined almost two years ago, a person familiar with the situation said.
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While at the New York Fed, Geithner recruited a number of finance executives to join the board of directors of the reserve bank, arguing it needed to better reflect the composition of the financial system, according to his memoir “Stress Test: Reflections on Financial Crises.” Among his recruits was Jamie Dimon, the CEO of JPMorgan, who served in that role from 2007 to 2012. The powers of the board do not extend to activities regarding supervision and regulation, according to the Fed bank’s bylaws.
Later, as Treasury secretary, Geithner oversaw the repayment of bailout funds that the nation’s banks received following the 2008 financial crisis. Dimon, whose bank had gotten $25 billion under the Troubled Asset Relief Program, called the program a “scarlet letter” and pushed for a quick repayment.
“Dear Timmy, we are happy to be able to pay back the $25 billion you lent us,” Dimon said in June 2009 at a conference, reading from a mock letter to Geithner. “We hope you enjoyed the experience as much as we did.”
