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GEITHNER
March 4, 2012
Geithner.....
About
In person
"you have to be open and honest and transparant about the scale of the challenge and make sure that investors around the world have the capacity to make judgements that differentiate across institutions and have an incentive to provide the funding that you need to provide for economies to function and you have to use overwhelming force and what we ultimately did - the US was of course behind the curve early too - but what we ultimately did is put politics aside and you had an incoming and an outcoming president from vastly different traditions in the American political system stand together and you had a central bank and a financial a finance ministry working very closely together to do whatever was necessary and it was that combination of actions that ultimately was decisive for us - although as a country, even with the remarkable success of that early stage of the financial rescue we have a lot of challenges ahead, very difficult challenges ahead and we're still living with the scars of that crisis."
"Let me start with the US. Obviously we have weaker growth than we thought. We could grow some we hoped. Why is that? It's the combination of three things. You have an economy that's still healing, bringing down debt through the imbalances that caused the crisis - that necessarily leaves growth weaker than you would like, more vulnerable than you would like, and you had a bunch of very substantial adverse shocks, higher oil prices, catastrophe in Japan, the trauma in Europe, combined with ungoing fiscal drag in ? governments, that we can grow through quite substantially. And you've had this terribly damaging political dysfunction, here and in Europe that leaves the world wondering the political system has the capacity to do the right thing - and that is very damaging to confidence, it has been devestating the confidence of the United States, and it magnified all the challenges. We have ultimately what you have to do is you have to put the economy ahead of politics and you have to put the ? of growth, not just the immediate growth, but long term growth fundmentals ahead of political considerations and all the other objectives that we face in the country and that's what we're trying to do. "
About Europe, for that is a dominant concern now. What they are doing is that they are tying to figure out how to build the architecture of a more complete fiscal-financial monetary union. THey're trying to help countries in terrible crisis implement a set of reforms that can help them get .. uh .. to fix a set of problems that it took decades to build up. And they have a terrible growth problem and they are trying to solve all those problems at once. And I think its important that you saw that there the chance - I saw Germany saw Merkel say yesterday, they are absolutely committed and they have the financial capacity, the economic capacity to do what it takes to hold this thing together. I think that they recognize that they are going to have to do more. They recognize that they have been behind the curve , they recognize that they are going to take more , uh, more force behind their committments to make sure that Italy and Spain can function under sustainable interest rates that the countries taking reforms in Ireland and Greece and Portugal have the financial support they need and, most importantly, that they make it clear -- and of course they have the capacity to do this -- that they will stand behind their financial system so that their system can fund and therefore finance recovery and those are the three things that you have to do. Um, I think they recognize that they have ? how severe the constraint, the challenges are right now - and I think that they have to recognize that they are going to have to do more to earn the confidence of the world, that they, uh, that they have the political will to do this."
"Europe has a traditiono of much more indulgence for their institutions. They are much closer to their governments - in just one man's view. There is no chance that the major countries of Europe will, uh, let their institutions be at risk in the eyes of the market. There is not a chance."
It is important to think that this is overwhelmingly a European challenge. Now it matters to us because it adds to a lack of confidence, uh, concerns about risk across the ..-it makes everybody more tentative. Think of us. We just went through this terribly damaging debate about the default in the United States -- you know people, elected people in the United States were talking openly about the merits of default , threatening default, saying it might be a desirable path for the country to go through -- when you ask people to contemplate the unthinkable like that it makes more scared, more tentative, uh, and so, Europe matters to us mostly because it adds to a caution around the world at a time when then things are still -- when we're still healing from the crisis - but our financial system is in a .. - because of the actions we took earlier in the crisis is in a much strong position to deal with these new risks in the world than it was, um, before this crisis -- much much strong position -- way ahead of the rest of the world in trying to make sure they have a stronger financial system to handle any type of shock. Uh, still we have a big interest as a country in helping Europe get through this and we are going to do everything we can to, uh, to help make it easier for them and to support them ....
[unquote]
You get the idea.
From: oldickeastman@q.vom