People in the news

Neal S. Wolin

Deputy Treasury Secretary (since May 2009)

Why He Matters

Treasury Secretary Timothy Geithner needed help. More than two months into his role as the head of the Treasury Department during the worst economic crisis since the 1930s, the fledgling cabinet secretary lacked top aides to implement a sweeping economic recovery plan. Most notably, Geithner didn't have a deputy.

In March 2009, after an exhaustive search that included a number of withdrawals by top candidates, President Barack Obama nominated Wolin to fill that job.

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Background

At a Glance

Career History: Deputy counsel for economic policy at the White House (Feb. 2009 to March 2009); President and chief operating officer for property and casualty operations at the Hartford Financial Services Group and other positions at Hartford (2001 to 2008); General Counsel at the Treasury Department (1999 to 2001)
Hometown: Chicago, Ill.

Alma Mater: Yale University, B.A. (history); Oxford University, M.S. (development economics); Yale, J.D.
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Path to Power

Wolin's parents lived in Evanston, Ill., just outside Chicago, where his mom was a director of the Israel Experience, a program at the Jewish Federation of Metropolitan Chicago that helps young adults visit Israel. His father was a partner at the Chicago law firm Cohon, Raizes & Regal.

Wolin went to Yale University where he earned a bachelor's in history, graduating summa cum laude. Wolin then went to Oxford University as a Charles and Julia Henry Fellow, earning a master's of science in development economics before getting a law degree at Yale.

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The Issues

Treasury Secretary Geithner was flying nearly solo in trying to right the listing U.S. economic ship in March 2009, when Wolin was nominated as his number-two.

Since coming aboard, the U.S. economy has shown signs of a life after the implementation of such things as the Public Private Partnership Investment program, which allowed private investors to purchase assets from banks in cooperation with the government, which will take on the majority of the risk. The program expects to rid lenders of up to $1 trillion of troubled assets.

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Wolin also played a key role in advising Geithner on Chinese currency concerns and the shape of major reform of the U.S. financial regulatory system, which may involve rolling back legislation that Wolin helped create in the Clinton administration.

"Too Big to Fail"

As Treasury general counsel in 1999, Wolin oversaw the team of lawyers that helped review the 1933 Glass Steagall Act that year.

Lawmakers largely reversed that law with the 1999 passage of the controversial Gramm-Leach-Bliley Act that allowed the merger of banks with insurance companies and brokerage firms; the newly-formed company had to submit to more oversight by the Federal Reserve. Many observers blamed much of the 2008-2009 financial crisis on these giant firms, which engaged in risky lending practices guaranteed by the federal government and then had to be rescued as they were deemed "too big to fail" because of the ripple effect that would create on the economy as a whole.

In early 2010, as the U.S. economy began to climb out of the recession, he expressed support for the "Volcker Rule," named after the Obama adviser and former Fed chairman Paul Volcker, which would sharply limit investment banks from engaging in significant proprietary trading or owning hedge funds.

"We should impose mandatory limits on proprietary trading by banks and bank holding companies, and related restrictions on owning or sponsoring hedge funds or private equity funds, as well as on the concentration of liabilities in the financial system," Wolin said in February 2010 testimony before the Senate Banking Committee. "These two additional reforms represent a natural - and important - extension of the reforms already proposed."

Financial Regulation Reform

In early 2010, Obama administration and Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) made a major push for financial regulatory reform.

In February 2010 testimony, Wolin outlined the key ingredients for successful overhaul. They included:

-"strong, consolidated supervision at the federal level" for all "large and interconnected banks. "The idea that investment banks like Bear Stearns or Lehman Brothers or other major financial firms could escape consolidated federal supervision should be considered unthinkable from now on," he said.

-increased capital and liquidity requirements for "the largest, most interconnected firms." Those requirements should be set at levels that compel the major financial firms to pay for the additional costs that they impose on the financial system, and give such firms positive incentives to reduce

their size, risk profile, and interconnectedness."

-strengthened "core infrastructure" of financial markets. Activities like derivatives trading should be subjected to "thorough, consistent regulation to improve transparency, and to reduce bilateral counterparty credit risk."

-a "strong, accountable" consumer protection agency

-"robust [government] authority to unwind a failing major financial firm in an orderly manner"

In calling for these reforms, Wolin echoed a July 2009 op-ed he penned for The Hill.

Wolin also advocated creation of a Consumer Financial Protection Agency, which would oversee banks and non-banks in order to prevent the marketing of substandard financial practices, like subprime loans.

Reform with many of these components was enacted in July 2010.

Insurance Representation

In June 2008, Wolin testified before the House Financial Services subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, backing the creation of a federal Office of Insurance Information (OII) within the Treasury Department. The office would "create an insurance expert who serves as the principal federal advisor on domestic and international policy issues for all lines of insurance but health.," he said. "In one stroke, we would answer the call for a single national voice on these important matters."

Creation of an OII was controversial because many felt it would create an oversight organization to which states' insurance commissioners would have to answer. The measure got through the subcommittee, but hasn't been considered by the full panel.

The Network

Wolin works directly under Treasury Secretary Geithner. Others within constant earshot of Geithner include Chief of Staff Mark Patterson and adviser Gene Sperling.

In his first stint at Treasury, Wolin worked under Clinton Treasury Secretary Robert Rubin and Rubin's successor, Obama's National Economic Council Director Lawrence Summers. While at the CIA, Wolin worked under current Secretary of Defense Robert Gates.

Campaign Contributions

Wolin has donated $20,962 since 2002, all of which has gone to Democratic candidates or Hartford Financial Services insurance company's political action committee (the Hartford is Wolin's former employer). In 2007, Wolin donated $2,300 to then-Sen. Hillary Rodham Clinton 's (D-N.Y.) presidential campaign. He switched candidates in 2008, giving Sen. Barack Obama (D-Ill.) $2,300 for his presidential campaign.

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