US TREASURY secretary Tim Geithner warned yesterday that the US government would consider ousting board members at US banks as a condition for giving them “exceptional” assistance in the future.

Mr Geithner said the Obama administration would be prepared to force out senior management to protect US taxpayers and ensure accountability as a condition for providing money to help banks restructure.

“If, in the future, banks need exceptional assistance in order to get through this, then we’ll make sure that assistance comes with conditions,” Mr Geithner told CBS TV.

“And where that requires a change of management of the board, we’ll do that.”

Mr Geithner was responding to a question about whether the chief executives of Citigroup and Bank of America should worry that they could suffer the same fate as Rick Wagoner, the former chief executive of General Motors who was ousted last month.

The White House put pressure on GM to secure Mr Wagoner’s resignation as a condition for giving the car maker more time to complete a restructuring plan with government loans.

Mr Obama’s economic team has faced heavy criticism recently after it emerged employees at AIG were awarded million-dollar bonuses even as the insurer was bailed out by the taxpayer. Mr Geithner pointed out that the administration had replaced the management and board of other companies that received “exceptional” help, including Fannie Mae, Freddie Mac and AIG.

"We've done that because we want to make sure that taxpayers' assistance is going to make these companies stronger, make sure there's accountability, make sure it comes with strong conditions." – (Copyright The Financial TimesLimited 2009)