UPDATE 1-US’ Geithner encourages urgency on Greek aid

(Adds Geithner comments on China currency, bank taxes)

By David Lawder and Glenn Somerville

WASHINGTON, April 23 (BestGrowthStock) – U.S. Treasury Secretary
Timothy Geithner on Friday urged Greece, Europe and the IMF to
move quickly on an aid package tied to Greek financial reforms
and said he was encouraged by signs of progress on the issue.

“Let me just say that I very much welcome the greater sense
of urgency we’re seeing and we’re encouraging the Greek
authorities, the Europeans, and the IMF to move quickly to put
in place a package of strong economic reforms and substantial
and concrete financial support,” Geithner told a press
conference after the G20 finance ministers’ meeting here .

In his prepared remarks, Geithner said some large emerging
economies were showing signs of relying less on exports and
more on consumption, but said they needed to reinforce that by
adopting market-oriented currency exchange rates.

He did not name any countries, but the United States and
other countries have been pressing China to allow more
flexibility in its yuan exchange rate, which would likely mean
its value would rise, making its exports more expensive.

Geithner turned aside repeated questions on whether he was
referring to China and whether Washington and Beijing had come
to an understanding that China would soon start to let its
currency rise again.

“I’m going to repeat what I’ve said before — nothing new
or different in how I respond to that basic question,” Geithner
said. “This is China’s choice. And I believe that China will
decide it’s in their interest to renew the (currency) reform
process, to resume the process of procedural reform that they
had embarked upon…several years ago, (and that was) suspended
during the crisis.”

China let its yuan gradually rise in value between mid-2005
and about mid-2008, but has effectively pegged the currency at
around 6.83 to the dollar since. U.S. manufacturers and
lawmakers say the yuan is significantly undervalued, handing
Chinese exporters a trade advantage that costs U.S. jobs.


Geithner conceded there was some disagreement within the
G20 over a proposal supported by some, including South Korea,
which chairs the group, to levy taxes on banks to make them pay
for any government bailouts.

With a domestic battle over regulation reaching its peak in
Washington, he said the United States would proceed with plans
to set a fee on the largest banks, with the amount paid
determined by the degree of risk they take.

He acknowledged that some countries like Canada were
opposed to such taxes on banks. Canada came through the
financial crisis relatively unscathed because of tighter bank
regulations than those in the United States, but Geithner said
he thought many countries would ultimately follow the U.S. lead
on this issue.

“There’s no surprise to me at this meeting that you saw a
diversity of views on this. But again we’re going to do what is
necessary in the United States, what’s in our interest,” he
said, adding that others would follow this example.
(Reporting by David Lawder and Glenn Somerville; editing by
Patrick Graham)

UPDATE 1-US’ Geithner encourages urgency on Greek aid