Geithner: Turning the corner from crisis to recovery
In testimony yesterday before a Congressional Oversight Panel, Treasury Secretary Timothy Geithner sounded an optimistic note about the state of the economy, stating that financial institutions are stronger after raising billions of dollars in capital. While Treasury plans to "wind down" many of its financial-rescue programs, Geithner encouraged policy makers need to stay vigilant in reinforcing the current level of economic stability, according to The Wall Street Journal.
As the Financial Times notes, financial institutions have repaid more than $70 billion in bailout funds and will repay another $50 billion over the next 12 to 18 months. Geithner even backed a Federal Deposit Insurance Corp. review that is likely to lead to the government either ending funding guarantees or restricting them only to emergencies.
Interestingly, Geither said that the government has not yet reached a decision about whether to extend the $700 billion financial rescue plan. No doubt, he is worried about how the financial institution will cope with the twin stresses of rising unemployment and a weak market for commercial real estate.
Questions about the government's rescue of Wall Street have surfaced again as the media focuses on the anniversary of the collapse of Lehman Brothers, once the fourth-largest investment bank on Wall Street. President Barack Obama is set to deliver a speech Monday to mark the occasion..