US treasury secretary: a defining moment for reform

WASHINGTON, April 12 (BestGrowthStock) – U.S. Treasury Secretary
Timothy Geithner said the country is at a defining moment for
financial reform and urged lawmakers to approve changes to
toughen bank rules to help avoid another economic crisis.

In an opinion-editorial piece to be published in Tuesday’s
Washington Post, Geithner said the United States was “close to
turning the page” on the economic crisis and was repairing the
financial system at a much lower cost than had been
anticipated.

“The true cost of this crisis, however, will always be
measured by the millions of lost jobs, the trillions in lost
savings and the thousands of failed businesses,” he wrote. “No
future generation should have to pay such a price.”

Geithner welcomed signs of support from both Republicans
and Democrats for financial reform legislation.

“This is a defining moment for financial reform,” he
wrote. “We have to get it right. We cannot build a system that
relies solely on the wisdom and judgment of future
regulators.”

“The best strategy for stability is to force the financial
system to operate with clear rules that set unambiguous limits
on leverage and risk.”

With Congress back from its Easter vacation, the Obama
administration is pushing lawmakers to approve the tougher
rules by September, two years after the failure of investment
bank Lehman Brothers triggered events that almost destroyed the
U.S. financial system.

The proposals aim to stamp out the practices that led to
the collapse, but they face opposition from Republicans
concerned about excessive regulation.

The House of Representatives approved a sweeping financial
reform bill in December. The Senate is on track to begin formal
debate this month on legislation that was passed by the Senate
Banking Committee without Republican support.

Democrats currently control both congressional chambers.

Proposed Senate legislation would toughen oversight of big
banks, create a $50 billion fund to help cover the costs of
winding down big firms that become insolvent and set up an
agency to protect consumers from the kind of risky financial
products that triggered the 2008 crisis.

Geithner said the Senate bill closes loopholes in current
law and would help ensure transparency to reduce fraud,
manipulation and risk.

He said with the Senate bill, “the United States would have
a strong hand in negotiating a global agreement on new capital
requirements by the end of the year.”

“Such an agreement would establish a level playing field by
requiring institutions to hold capital minimums and compliance
would be open to scrutiny by regulators and the markets.”

“The Senate bill is strong,” he wrote. “As the bill moves
to the floor, we will fight any attempt to weaken it. The
American people have suffered through too much to enact reform
that does too little.”

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(Reporting by Deborah Charles, editing by Vicki Allen)

US treasury secretary: a defining moment for reform