Obama: U.S. will ensure financial system solvent

President Barack Obama speaks at the U.S. Hispanic Chamber of Commerce 19th Annual Legislative Conference in Washington March 10, 2009.

WASHINGTON (Reuters) - President Barack Obama said on Wednesday the United States was committed to the solvency of its financial system and would deliver this message to leaders of other major economies.

At this weekend's meeting of Group of 20 finance ministers, the United States will call on other countries to take economic stimulus measures while working together to tackle financial regulatory reform, Obama said.

"We've got two goals in the G20," Obama said during a meeting with Treasury Secretary Timothy Geithner, who will take part in the meeting in England on Friday and Saturday of G20 finance ministers and central bankers.

"The first is to make sure that there is concerted action around the globe to jumpstart the economy. The second goal is to make sure that we are moving forward on a regulatory reform agenda," Obama said. The G20 comprises major developed and emerging economies.

The finance officials gathering in Horsham, Sussex will prepare for an April 2 summit in London of G20 leaders to discuss dealing with the worst economic crisis in decades.

"We're moving forward in stabilizing the financial system through a whole host of steps that have already been taken, and a number of steps that we intend to take in the future to make sure that the financial system is solvent, that our banks are strong," Obama said.

Geithner's G20 counterparts are eager for more clarity from the United States about its plan to cleanse the banking system of toxic debt securities.

These assets, many backed by troubled subprime mortgage loans, are central to the credit market crisis disrupting the global financial system and dragging down the economy.

Concern about the troubled financial system has weighed heavily on U.S. stock prices in recent weeks.

Many on Wall Street panned a plan Geithner announced several weeks ago to address the problem for lacking details.

However, the stock market has staged a two-day rally, helped by an interview Geithner gave on Tuesday in which he promised details on how he would rid the banks of bad assets.

As the G20 meeting approaches, Washington has emphasized its belief that the group's most pressing task should be to spur growth through spending and tax cuts.

FEAR TOO MUCH DEBT

Some European countries fear taking on too much debt and worry that a focus on economic stimulus would overshadow efforts to revamp the global financial regulatory system.

Seated next to Obama, Geithner emphasized jumpstarting growth but said the United States also wants to forge global consensus on "how to strengthen this global financial system so that a crisis like this never happens again."

Federal Reserve Chairman Ben Bernanke said on Tuesday the G20 should agree on principles for rewriting financial rules but it was "asking too much" for them to produce detailed proposals.

The World Bank predicted in a report on Sunday that the world economy would shrink this year for the first time since World War Two.

Obama said it was important for the G20 to make sure "we are not falling into protectionist patterns" on world trade."

"One of the things that Secretary Geithner is going to be talking about is how can we make sure emerging markets, developing countries that may be very hard hit as a consequence of the contracting economy, how do we make sure that they remain stable," Obama said.

"If you continue to see deterioration in the world economy, that's going to set us back," he added.

(Editing by Alan Elsner)