The U.S. Treasury chief testified a week before he and President Barack Obama attend an April 2 Group of 20 meeting in London that is focused on reforming the financial system. This in an ongoing effort to try to help lift the global economy out of recession.
Deborah Lutterbeck reports from Washington
STORY:
Treasury Secretary Timothy Geithner is calling for sweeping reform of the US financial system, telling the House Financial Services Committee that the time has come to change the rules.
SOUNDBITE: Treasury Secretary Timothy Geithner, saying (English):
"To address this will require comprehensive reform. Not modest repairs at the margin, but new rules of the game. The new rules must be simpler and more effectively enforced and produce a more stable system, that protects consumers and investors, that rewards innovation and that is able to adapt and evolve with changes in the financial market."
Geithner used the example of American International Group to make the point for regulation of companies like insurers that were taking huge risks on exotic products like credit default swaps.
SOUNDBITE: Treasury Secretary Timothy Geithner, saying (English):
"Market discipline failed to contain dangerous levels of risk-taking throughout the system. New financial products were created to meet demand from investors, but the complexity outmatched the risk management capabilities of even the most sophisticated financial institutions in the world.
The U.S. Treasury chief testified a week before he and President Barack Obama attend an April 2 Group of 20 meeting in London that is focused on reforming the financial system. This in an ongoing effort to try to help lift the global economy out of recession.
Deborah Lutterbeck reports from Washington
STORY:
Treasury Secretary Timothy Geithner is calling for sweeping reform of the US financial system, telling the House Financial Services Committee that the time has come to change the rules.
SOUNDBITE: Treasury Secretary Timothy Geithner, saying (English):
"To address this will require comprehensive reform. Not modest repairs at the margin, but new rules of the game. The new rules must be simpler and more effectively enforced and produce a more stable system, that protects consumers and investors, that rewards innovation and that is able to adapt and evolve with changes in the financial market."
Geithner used the example of American International Group to make the point for regulation of companies like insurers that were taking huge risks on exotic products like credit default swaps.
SOUNDBITE: Treasury Secretary Timothy Geithner, saying (English):
"Market discipline failed to contain dangerous levels of risk-taking throughout the system. New financial products were created to meet demand from investors, but the complexity outmatched the risk management capabilities of even the most sophisticated financial institutions in the world.
The U.S. Treasury chief testified a week before he and President Barack Obama attend an April 2 Group of 20 meeting in London that is focused on reforming the financial system. This in an ongoing effort to try to help lift the global economy out of recession.
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