Geithner Has Concerns About President’s Proposed New Bank Rules

Jake Tapper and Matt Jaffe report:

Treasury Secretary Tim Geithner has reservations about President Obama's new proposal to limit the size and scope of the nation's banks, sources tell ABC News.

Specifically, the sources say, Geithner is worried that the proposed limits could damage the competitiveness of US firms with their global competitors.

"It needs to be done right,” one source close to Geithner told ABC News. “How it gets implemented and how it gets defined is absolutely critical. We don’t want to disrupt the ability of banks to lend.”

Another source in the financial industry says that the Treasury boss fears that political fears may now be overriding economic considerations.

But on the other hand, with financial regulatory reform legislation bottle-necked in the Senate, Geithner is pleased that President Obama is more engaged in the issue today than at the end of 2009, when he was focused more on health care reform and Afghanistan.

Geithner - along with the rest of the administration's economic team - was standing behind the President at today's White House announcement.

Reuters was first to report Geithner's concerns earlier Thursday evening.

-Jake Tapper and Matt Jaffe

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