The Obama administration intends to quickly put new rules for the financial marketplace into action but won't layer new rules on top of old, U.S. Treasury Secretary assured Wall Street on Monday.
Amid rising doubt about the recovery's durability and Washington's economic stewardship, Geithner traveled to New York to meet Mayor Michael Bloomberg and captains of industry to calm fears that new rules will crimp their competitiveness.
We will move as quickly as possible to bring clarity to the new rules of finance, he said in prepared remarks for delivery at an event sponsored by New York University. We will not risk killing the freedom for innovation that is necessary for economic growth.
President Obama signed a huge 2,300-page package of financial regulatory reforms -- prompted by lawmakers' anger at Wall Street's role in precipitating the 2007-2009 financial crisis -- into law last month but it is largely a work in progress since rules to implement it are still being drawn up.
Geithner said Treasury will try to speed up the rule-making process. That would reduce the period of uncertainty for banks and other businesses but also mean lobbyists for the financial industry would have less time to influence the rules.
The rule-writing process traditionally has moved at a frustrating, glacial pace, Geithner said. We must change that.
Geithner was effectively extending an olive branch to Wall Street banks that fought against tightening financial rules, saying it was necessary to balance protection for consumers against businesses' drive to create new products and boost profits.
Our system allowed too much freedom for predation, abuse and excess risk, but as we put in place rules to correct for those mistakes, we have to strive to achieve a careful balance and safeguard the freedom, competition and innovation that are essential for growth, he said, according to excerpts provided by the U.S. Treasury.
He suggested there could be benefits for business by eliminating some old rules, though he didn't publicly specify which ones. Geithner was meeting privately with unnamed business leaders before he spoke at New York University.
Alongside our efforts to strengthen and improve protections for the economy, we will eliminate rules that did not work. Wherever possible, we will streamline and simplify, he said in his prepared remarks.
(Reporting by Glenn Somerville and Tim Ahmann; Editing by Padraic Cassidy)