U.S. Treasury’s Lew Wants More Action on European Banks

U.S. Treasury Secretary Jacob J. Lew called for more progress on strengthening Europe’s banks, while praising steps taken so far on bank resolution and cross-border financing mechanisms.

“We would like to see more action taken, but I think you have to look at where things were just a year and a half ago and where things are now,” Lew said at a press conference in Paris today after a meeting with French Finance Minister Pierre Moscovici. “The finance minister and I have said enormous progress has been made in the past year, 18 months, if you look at the decisions that were made in terms of resolution and building cross-border mechanism financed by banks.”

Lew, on a two-day tour that also includes Germany and Portugal, wants to make sure that Europe follows the U.S. lead by adopting measures to strengthen banks. He is also encouraging his European counterparts to bolster economic growth in the 18-nation euro area.

“The more capital that there is in European banks and the stronger the backstops are, the better it is for the European economy, the U.S. economy and the global economy,” the Treasury secretary said.

Lew praised the steps France has taken to bolster the economy.

“France has taken some notable steps to sustain demand while making structural reforms that have medium- to long-term impact,” Lew said. “I’m confident that the government remains committed to doing what it takes to foster recovery.”

Lew said he will continue to emphasize in the countries he visits that “short-term demand has to be part of the agenda, in terms of keeping growth moving in the right direction.”

“That is not to say that we can take our eye off the ball of the kinds of structural reforms that are needed to make sure that we have the foundation for long-term economic growth,” he said.

“The growth agenda has to be rooted in investment and demand,” Lew said. “It’s clear that some countries have more capacity to stimulate growth and demand than others do.”

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