US Treasury Secretary Timothy Geithner said yesterday he would be meeting the new British chancellor of the exchequer and other European colleagues to press for a global approach to financial reform and discuss Europe’s economic crisis.
“I’m going to meet the new UK government to prepare for the next stage of global financial reform — on the heels of what we expect to be a quick passage of US reforms — to emphasize the importance of a carefully designed global approach and to discuss developments in Europe,” Geithner told reporters aboard an overnight flight from China.
Geithner was accompanied on the flight by White House economic adviser Christina Romer, who was en route to Paris for meetings of the Organization for Economic Cooperation and Development.
Romer, who also visited China with Geithner, said Washington was emphasizing the importance of having credible plans in place for getting deficits under control.
She said that in the case of the US, there was still room for measures to reduce high unemployment.
“We absolutely agree on the need to reduce the deficit over time, but for a country like the US, there is still space and need for targeted actions,” she said.
After meeting British Chancellor of the Exchequer George Osborne, Geithner was scheduled to see Bank of England Governor Mervyn King later yesterday, before flying to Frankfurt, Germany, for a dinner meeting with European Central Bank President Jean-Claude Trichet.
He will then head for Berlin today for a late morning meeting with German Finance Minister Wolfgang Schaeuble, before heading back to Washington.
Investors are not confident that measures so far, including Germany’s unilateral ban on some financial trades, austerity plans by indebted eurozone members or even a 750 billion euro (US$926 billion) rescue fund will be enough to prevent Europe’s woes from derailing the global recovery.
Geithner will also urge European officials to conduct bank stress tests, CNBC reported.
The US Treasury declined to comment.
Any stress tests, however, would have to differ from those conducted by US regulators in the spring of last year, because Europe lacks a huge bailout fund like the US$700 billion Troubled Asset Relief Program to plug any capital deficiencies found, CNBC said.
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