Tags: US | Geithner | Crisis

Geithner: There Will Be No 'Second Wave' Crisis

Tuesday, 22 Dec 2009 10:00 PM

 

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Treasury Secretary Timothy Geithner said Tuesday the Obama administration is confident it will prevent a repeat of last year's financial crisis, the worst to hit the country in seven decades.

"We are not going to have a second wave of financial crisis," Geithner said in an interview with National Public Radio. "We cannot afford to let the country live again with a risk that we are going to have another series of events like we had last year. That is not something that is acceptable."

Geithner, interviewed on NPR's "All Things Considered" program, rejected the idea that a serious new crisis could be triggered by lingering problems with commercial real estate loans or with a sudden weakening in the value of the dollar.

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"We will do what is necessary to prevent that and that is completely within our capacity to prevent," he said.

Geithner spoke on a day when President Barack Obama met with executives from a number of community banks, reiterating his plea for banks to do more to lend to small businesses. Obama took a more conciliatory tone with the leaders of the smaller community banks than he had in a meeting last week with leaders of the country's largest banks.

Geithner, referring to the actions of the large banks in last year's crisis, said he did not believe they yet understood that they had lost the "confidence and trust of the American people." He said bankers had a "long way to go" to restore that confidence.

Geithner defended his numerous contacts with executives from the largest banks, contacts that were revealed in telephone calendars obtained in October by The Associated Press under the Freedom of Information Act.

Geithner said that he also spent a considerable amount of time talking to owners of small businesses and to small banks as well. He called it a "misperception" that he was devoting too much time conferring with the largest banks. He said the conversations he had right after taking office should be viewed in the context of the serious crisis facing the financial system last winter and spring.

"I'm the secretary of the Treasury. I have to spend time figuring out what it's going to take to fix the things that are broken in the financial system," he said.

Asked about the economy, Geithner said there were a number of signs that economic conditions were beginning to improve in terms of consumer and business confidence rising. He said it was likely that overall economic growth in the current quarter is accelerating, but he cautioned that dealing with the economy's troubles would take time.

"We were in a very deep hole and it is going to take a long time to repair the damage done to confidence," he said.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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