Former Treasury Secretary Tim Geithner defends the government's 2008-09 bank bailout in his new book, "Stress Test." But former FDIC Chair Sheila Bair begs to differ.

"Tim's book has reinvigorated a much-needed debate about whether our financial system should be based on a paradigm of bailouts or on one of accountability," she writes in an article for Fortune.

"Though the vast majority of Americans favor the latter, Washington's love affair with big finance continues."

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Reform efforts have been inadequate, Bair argues. "The hard work to force mega-banks to raise more capital, replace their unstable short-term funding with long-term debt and simplify their legal structures is at best, half-done."

Geithner openly admits that he's not worried about ending the "too big to fail" syndrome for banks, Bair says. "But what's troubling is his failure to acknowledge the inherent instability created when Wall Street thinks it has a giant put on Uncle Sam," she writes.

"He accepts the risks of moral hazard when it comes to bailing out homeowners, but not the mega-banks. He almost naively assumes that the titans of Wall Street can somehow rise above the temptation to take outsized risks when they know the government will always be there to bail them out," Bair adds.

"Tim's justification of the bailouts is based on a false dilemma: that our only choices were either to do nothing or to pursue the over-the-top measures, which we did."

Geithner offered a defense of his stance in The Wall Street Journal last week. "What one has to do in a panic is the opposite of what seems fair and just," he wrote.

"In a financial crisis, the natural instinct is to let creditors suffer losses, let firms fail and protect taxpayers from any risk of loss. But in a financial panic, a strategy based on those instincts will lead to depression-level unemployment."

"I guess I would feel better about Tim's rationalizations of the bailouts if I thought he was more committed to avoiding them in the future. But instead of openly and vigorously advocating for meaningful financial reform, he seems to think we have pretty much done all we can or should do," Bair concludes.

"I think we should apologize for the bailouts. He wants to be thanked for them. But if we glorify regulators when they bail out the industry, while savaging them when they try to regulate it, what kind of system will we have?"

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