Geithner encourages urgency on Greek aid

WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner on Friday urged Greece, Europe and the IMF to move quickly on an aid package tied to Greek financial reforms and said he was encouraged by signs of progress on the issue.

"Let me just say that I very much welcome the greater sense of urgency we're seeing and we're encouraging the Greek authorities, the Europeans, and the IMF to move quickly to put in place a package of strong economic reforms and substantial and concrete financial support," Geithner told a press conference after the G20 finance ministers' meeting here .

In his prepared remarks, Geithner said some large emerging economies were showing signs of relying less on exports and more on consumption, but said they needed to reinforce that by adopting market-oriented currency exchange rates.

He did not name any countries, but the United States and other countries have been pressing China to allow more flexibility in its yuan exchange rate, which would likely mean its value would rise, making its exports more expensive.

Geithner turned aside repeated questions on whether he was referring to China and whether Washington and Beijing had come to an understanding that China would soon start to let its currency rise again.

"I'm going to repeat what I've said before -- nothing new or different in how I respond to that basic question," Geithner said. "This is China's choice. And I believe that China will decide it's in their interest to renew the (currency) reform process, to resume the process of procedural reform that they had embarked upon...several years ago, (and that was) suspended during the crisis."

China let its yuan gradually rise in value between mid-2005 and about mid-2008, but has effectively pegged the currency at around 6.83 to the dollar since. U.S. manufacturers and lawmakers say the yuan is significantly undervalued, handing Chinese exporters a trade advantage that costs U.S. jobs.

DIFFERING VIEWS ON BANK TAX

Geithner conceded there was some disagreement within the G20 over a proposal supported by some, including South Korea, which chairs the group, to levy taxes on banks to make them pay for any government bailouts.

With a domestic battle over regulation reaching its peak in Washington, he said the United States would proceed with plans to set a fee on the largest banks, with the amount paid determined by the degree of risk they take.

He acknowledged that some countries like Canada were opposed to such taxes on banks. Canada came through the financial crisis relatively unscathed because of tighter bank regulations than those in the United States, but Geithner said he thought many countries would ultimately follow the U.S. lead on this issue.

"There's no surprise to me at this meeting that you saw a diversity of views on this. But again we're going to do what is necessary in the United States, what's in our interest," he said, adding that others would follow this example.

(Reporting by David Lawder and Glenn Somerville; editing by Patrick Graham)