The U.S. Treasury Secretary Timothy Geithner spoke today at the National Press Club, as the Geithner signaled that the Treasury is indeed doing a good job concerning the speed, quality of policy, as the Treasury in combined efforts with the Federal Reserve Bank continued to support the financial system though pumping huge amounts of liquidity.

Geithner added that the pace of slowdown in economic activity is easing and that the U.S. economy has reached stability, Geithner also signaled that credit markets are improving though challenges remain. While Geithner believes the anticipated recovery will be rather slow, as the economy is still fragile.

Meanwhile Geithner expects the unemployment rate will continue to rise over the upcoming period, despite that he expects growth to rebound, while stressing that the Fed's role in the overhauling process for the financial rules is still to be decided.

Geithner also added that the rising budget deficit represents the main challenge in the next 5 years, as Geithner signaled that the deficit must be controlled quickly, as he said that fiscal condition is unsustainable.

Geithner also stressed that there's a broad proposal for oversight that should be released over the next few weeks, while he signaled that derivatives rules would have helped avert crisis, though Geithner called for better oversight for derivative markets.

Geithner also said that he doesn't believe the government should put caps on compensation but rather connect pay to long-term incentives, while adding that he expects Americans to increase their savings and reduce their borrowings over the upcoming period, and Geithner expects that doing so would slowdown the recovery process.

Geithner also signaled that the Treasury is keeping a close eye on California debt, as the Golden State is ailing under pressure amid its rising budget deficit, while Geithner indicated that there's a huge improvement in municipal finance, though Geithner admitted that municipal borrows are facing challenges, while adding that there are a number of ideas to help aid borrowers of municipal bonds, as the Treasury will seek discussions with the Congress for helping municipals.

Municipals in the United States have been affected deeply by the crisis, as States are falling under huge pressures amid rising budget deficits, while investors fleeing credit markets intensified the problem, as sources of funding diminished and municipals were left to face rising obligations with no funding.