- Title: USA: Treasury Secretary Geithner says financial overhaul "very close"
- Date: 19th April 2010
- Summary: NEW YORK, NEW YORK, UNITED STATES (FILE) (REUTERS) NEW YORK STOCK EXCHANGE EXTERIOR WALL STREET SIGN
- Embargoed: 4th May 2010 13:00
- Location: Usa
- Country: USA
- Topics: Finance
- Reuters ID: LVADQ3QD2GOOHF2CKPCFD4569DB
- Aspect Ratio:
- Story Text: U.S. Treasury Secretary Timothy Geithner said on Sunday (April 18) he was confident there was enough political unity on Capitol Hill for the U.S. Senate to forge a strong financial regulatory bill despite differences over some parts of it.
"I am very confident that we're going to have the votes for a strong package of financial reforms that'll bring derivative markets out of the dark, help protect the taxpayers from having to fund future bailouts and trying to make sure we're getting Americans some basic protection against fraud and abuse," Geithner said in an interview on NBC News' "Meet the Press" program.
During the financial crisis that struck in force in 2008, taxpayers were put at risk because the government decided it had to bail out ailing banks and other financial firms for fear that not doing so would harm the broader economy.
Proposals for winding up or putting ailing big financial firms into bankruptcy have already passed the U.S. House of Representatives but have yet to come before the Senate.
A massive financial regulatory bill aimed at tightening oversight of banks and capital markets is expected to come to the Senate floor later this summer for a final vote after Banking Committee Chairman Christopher Dodd steers it through his committee.
Geithner, who has spearheaded the Obama administration's efforts to persuade Congress to move on reforms aimed at preventing a repeat of the devastating financial crisis, conceded there were still some problem areas.
President Barack Obama said on Friday he would veto any bill that did not impose strong enough controls over markets for derivatives -- financial instruments that derive their value from the price of some underlying instrument or event.
Regulators on Friday charged Wall Street giant Goldman Sachs with fraud linked to subprime mortgages, which drove bank shares and the broader stock market lower on the day.
Geithner refused to comment on the charges against Goldman Sachs. He said there had been failures of judgment by people who ran big U.S. financial institutions and the purpose of regulatory reform was to make sure they paid the consequences of their actions by themselves.
"The best thing we can do for the country is to make sure we put in place strong protections, rules of the game, reforms with teeth. You want a system that acts preemptively to prevent these things from happening. You don't want a system where have to come up and clean up the mess later. The best way to protect Americans from these things happening is to put a stronger system in place where people were able to-- act ahead of the storm. Ahead of the abuse. Ahead of the crisis," Geithner said.
Geithner predicted the economy has reached a stage of recovery where sustained job growth can be expected. But he conceded that relatively high current unemployment levels meant the housing market still faces trouble.
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