Geithner: Don’t Put Brakes on Regulatory Reform

Posted September 29, 2009 at 2:40pm

Treasury Secretary Timothy Geithner on Tuesday defended his proposed overhaul of the financial system and said a consensus appears to be emerging on its key elements.

The administration has been pushing Congress to finish a regulatory reform package by the end of the year, and Geithner reiterated his desire to see action in the near term.

“Obviously we want to get this done as quickly as we can,— he said. “As we’ve seen before, as you let the memory of the crisis fade, it’s easier for people to fight reform. The best strategy our opponents can adopt is to slow things down.—

But Geithner said there’s already been movement.

“My own sense is that the reform package is actually making a lot of progress. There is quite a lot of consensus on the core elements.—

“It’s a very hard argument to make that the system worked and we should just tinker at the margins,— he added. “We must come out of this with a stronger financial system, not a weaker one, we need to set an example of high standards for the world, and by doing so we will be well-placed to push the pace for reform globally.—

Congress is poised to advance the regulatory overhaul in the coming weeks, with a goal of having a final product to President Barack Obama by the end of the year.

The administration has proposed both a tightening of the reserves required for large institutions so they are less likely to fail as well as a new resolution authority that would dispose of them in an orderly fashion if they do fail.

Although optimistic, Geithner still faces plenty of hurdles to getting a bill done in the next few months, including the opposition of many financial firms to the creation of a new consumer agency to oversee the safety of financial products, as well as turf battles within the government over who should oversee what.