Treasury Secretary Timothy Geithner says some parts of the U.S. economy are very strong and that the United States was rebounding from recession more quickly than most other major economies.
Geithner, in an interview airing on Thursday on ABC's Good Morning America, described the U.S. economy as stronger and showing normal signs of recovery.
Absolutely stronger. Again, encouraging signs of, really, across the economy, of things in the better, Geithner said. Parts of the economy are really very strong -- technology. Manufacturing is getting better.
He cited General Motors Co.'s payback of a $6.7 billion government loan and the fastest pace of auto industry job creation in a decade as encouraging signs, along with strengthening private investment and consumer spending.
But he described the United States as still a very tough economy out there and said more work was needed to boost credit for small businesses.
In a round of interviews on U.S. morning television, Geithner expressed confidence that financial reform legislation will pass in the U.S. Congress now that Republican opposition to regulatory overhaul appears to have softened.
If you just listen to the tone of the last couple of days, it's changed. I spent a huge amount of time with Republicans over the last few weeks ... and I think they really want to be for this, he said in an interview on CBS's The Early Show.
President Barack Obama is due to argue the case for financial reform in a speech in New York later in the day, as Democrats rally support for regulatory reform measures headed for a possible Senate vote next week.
Financial reform is a popular issue with voters and Democrats believe it could help them in the November congressional elections. The legislation appears to have gotten a boost from fraud charges brought against Wall Street powerhouse Goldman Sachs last week.
Geithner said reforms should put the government in a position to act more pre-emptively ahead of any future crisis.
Among these are reforms to bring more transparency to the derivatives market.
Asked if he thought a proposal before the Commodity Futures Trading Commission to allow trading of futures based on film industry box-office receipts, was a good idea, Geithner said: No, I don't.
He added, however, that he was not inclined to ban specific products because Wall Street would always innovate with new products aimed at meeting real economic needs to or allow speculative bets on specific outcomes.
You can't run a system where you have a bunch of bureaucrats in Washington trying to figure out what's risky and what's not, because the risk is they'll miss it, they'll be too late, or they'll overdo it, he said. So the best thing we can do for the country is to make sure the system just has better protections in place when innovations go a little too far.
He said neither the Treasury nor the White House received any advance notification or warning from the Securities and Exchange Commission ahead of the regulator's filing of fraud charges against Goldman Sachs Group last week over the way the bank sold credit derivatives products.
That could never happen, it should never happen, he said. The SEC is a fully independent agency and they give no warnings, no notice, no heads up. And there should be no involvement by any person in the executive branch ever in those kind of investigations.
Geithner declined to comment on the specifics of the Goldman case, but added that he believed more transparency was needed for derivatives markets, which legislation under consideration by the U.S. Senate would achieve.
(With additional reporting by Mark Felsenthal; Editing by Will Dunham)