Treasury Secretary Timothy Geithner said on Monday the U.S. economy was beginning to stabilize, but cautioned that consumers will still feel the pain of the current downturn for some time.
The economy has clearly stabilized, Geithner said at a luncheon sponsored by Newsweek magazine. The pace of decline in most measures of economic activity has slowed quite a lot and that's an important beginning.
But the road ahead will be bumpy, he added, noting that unemployment was likely to keep rising. It's not going to feel better for a long time for millions of Americans.
Geithner has been immersed in the Obama administration's effort to find a way to wrench the economy out of a severe recession stemming from a subprime mortgage-induced credit crisis that rocked the U.S. banking system and forced the government to initiate a massive taxpayer-financed bailout.
He said proposals for a broad regulatory overhaul were coming within a few weeks and said it will include stiffer oversight of lightly regulated derivatives markets among other new measures.
We need to take a fresh look at our entire financial system, because our financial system failed to do some critically important things, Geithner said.
We have an incredibly archaic, segmented, complex oversight regime across our system, he said, adding that it had failed to protect either consumers or investors and had to be changed in order to contain risk-taking.