Geithner Predicts Europe Will Follow Lessons of U.S. Crisis
U.S. Treasury Secretary Timothy F. Geithner predicted that Europe will adopt some of the same measures the U.S. took to battle the financial crisis that started in 2008.
“I think you’re going to see them draw on the lessons of our crisis, draw on the lessons of things that worked here in the United States,” Geithner said in a Bloomberg Television interview today in Washington. “I think you’ll see that reflected in some of the choices they make.”
In the aftermath of the September 2008 bankruptcy of Lehman Brothers Holdings Inc., the U.S. adopted the $700 billion Troubled Asset Relief Program and the Federal Reserve conducted stress tests of the 19 largest financial institutions to ensure their capital was adequate to withstand a more severe economic downturn. The Fed also set up the Term Asset-Backed Securities Loan Facility, or TALF, to keep consumer credit flowing.
Geithner visited Poland last week to meet with European officials, who rebuffed his suggestions for fixing their debt crisis. The Treasury secretary urged European leaders to set aside their differences to excise “catastrophic risks” from the markets.
“The Europeans are under a lot of pressure still,” Geithner said today. “They’re going through a really tremendously difficult job of trying to build a stronger union, stronger economic union with a very strong financial firewall to help those countries that are undertaking reforms.”
Europeans “have a lot of work to do,” Geithner said. “They recognize that more than anybody.”
Greek Prime Minister George Papandreou’s government will hold another call with its main creditors tomorrow. Finance Minister Evangelos Venizelos held “substantive” discussions with officials from the European Union and International Monetary Fund about securing a sixth installment of rescue funds, the Athens-based finance ministry said in an e-mailed statement. A second call will be held tomorrow evening.
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