Robert K. Steel

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Robert K. Steel is the incumbent Under Secretary for Domestic Finance within the United States Department of the Treasury. He was sworn in on October 10, 2006. From February 2004 until September 2006, he had served as a senior fellow at the Center for Business and Government at the John F. Kennedy School of Government at Harvard University. He retired from Goldman Sachs as a vice chairman of the firm on February 1, 2004. He received his undergraduate degree from Duke University and his Master of Business Administration degree from the University of Chicago.^[1]

Robert Steel had joined Goldman Sachs in 1976 and served in the Chicago office until his transfer to London in 1986. In London, he founded the Equity Capital Markets group for Europe and was extensively involved in privatization and capital raising efforts for European corporations and governments. He later assumed the position of head of Equities for Europe. In 1994 he relocated to New York and served as head of the Equities Division from 1998 to 2001, until his appointment as a vice chairman of the firm. In 1988 he became a partner and joined the Management Committee in 1999. Upon his retirement from Goldman Sachs, he assumed the position of advisory director for the firm and then senior director in December 2004.^[1]

He is also the chairman of Board of Trustees at Duke University. ^{[2] [3]}

[edit] Under Secretary of the Treasury for Domestic Finance

[edit] Credit crisis

Under Secretary Robert Steel presided over turmoil in credit and mortgage markets. He warned in early September 2007 that the process was "far from over." He said, "Policy makers must remain vigilant as further stress could create further challenges and continued volatility."^[4] He joined Under Secretary for International Affairs David McCormick in calling for the Group of Seven's financial stability watchdog to produce a detailed report on the root causes of current market problems for the October meeting of G7 finance ministers in Washington.^[5]

However, on September 6, 2007, he stated on CNBC Television he was optimistic that money markets would be operating normally by year-end as a liquidity crunch eases and confidence in the market returns. He said that it would still take time and encouragement for banks to become more comfortable in taking lending risks.^[6] He appeared before the United States House Committee on Financial Services to discuss the issue.^[7]

During that hearing, he said,^[8]

"As interest rates began to rise in 2004, mortgage origination fell to just under $3 trillion. With this decline, there was significant overcapacity in the mortgage industry. To satisfy continued investor demand for mortgage-backed securities in their excess capacity, some mortgage originators relaxed their underwriting standards, lending to individuals with a lower standard of documentation, and thereby selling mortgage products, which for some borrowers would become unaffordable. The combination of rising interest rates and mortgages resetting in higher rates and a decline in house price appreciation led to rising delinquencies and defaults among sub-prime borrowers. ... The uncertainty regarding the future prospects of these mortgage-backed securities compelled investors to reassess the risk of these securities, and subsequently, reassess price."

[edit] References