RTTNews - Treasury Secretary Timothy Geithner will travel to Italy later this week for a meeting of the G-8 finance ministers to take stock of global efforts to address the economic downturn and establish new rules for financial systems.
The principle focus of our conversation will be to take stock of efforts, policy efforts undertaken by the G-8 and around the world to help lay a foundation for recovery, address the crisis and to take stock of the progress we're making in building consensus for reform of the international financial system, he said.
The meeting will largely be a continuation of progress made at the G-20 summit of heads of state in London, Geithner said and will look to lay the foundation for the next G-20 meeting later this summer in Pittsburg.
The meeting will take place against a backdrop of some improvement in the global financial system, Geithner said.
I think it's fair to say that the force of the global storm is receding a bit, he said. Concern about systemic risk in the financial sector, about the risk of deflation globally has receded. There's some sign of stabilization in output and demand . some modest improvement in confidence.
He added, These are, I think, encouraging signs.
In the U.S., Geithner said he was also encouraged by the decision of 10 major banks to buy out $68 billion the Treasury had invested in them.
But, I think, more importantly has been the scale of capital infusions in the financial system over the last four weeks, he said. I think fundamentally those signs of improvement here and around the world are the result of the policy actions we started to put in place both in the United States and similar actions we've seen.
He added, The collective impact on confidence of the world coming together and acting in a relatively coordinated way to provide support for recovery demand, to address the crisis, fix financial systems and come together on consensus for reform, I think, had a powerful impact on confidence.
Geithner added that there was still a lot of work yet to do, emphasizing the importance of sustained efforts.
We'll have a chance to listen to them, see where they are, what they think about evolving risks and challenges, he said. The basic commitment we all made in London was that we're going to keep at it until we have this thing fixed and we get a strong foundation for recovery in place.
Geithner also emphasized that the improving conditions have not weakened the desire globally for a reformed economic regulation system, noting that he and President Barack Obama would in coming weeks lay out a series of proposals for reforming regulation in the U.S.
That's one reason why we want to move quickly on the reform agenda is to make sure we don't lose the motivation for reform that's provided by the, I can't say memory yet, because we're living through this still, by the knowledge of the extent of the damage caused by those basic failures, he said.
He added, We're trying to focus on the things that were at the core of what made our system vulnerable and that's what's going to guide our approach. My sense is we have a lot of support on the Hill, across the financial community for reform and I think we can be reasonably optimistic that we're going to achieve a very substantial reform of the basic framework in which institutions operate in the United States.
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