(Adds details, background)
By Glenn Somerville and David Lawder
WASHINGTON, Sept 2 U.S. Treasury Secretary
Timothy Geithner said on Wednesday he will set out principles
for a new global accord to constrain the excessive use of
leverage by banks.
Speaking ahead of a meeting on Friday and Saturday in
London of G20 finance chiefs, he emphasized he was not seeking
an immediate agreement and said it was too soon to clamp down
on the financial sector as it struggles to return to normal
"We're going to be outlining a framework of principles to
begin a discussion -- not to reach agreement on -- but to
discuss a framework of principles on a new international
capital accord that will put in place, once the crisis is
behind us, a more conservative framework of constraints on
leverage in the financial sector across the major globally
active financial institutions," Geithner told reporters.
The U.S. Treasury chief said the global economy has been
pulled back "from the edge of abyss" in the past year and was
showing early signs of resuming growth but said it was too
early to let up on efforts to get sustained recovery going.
"We've come a very long way. We have a very long way to go
still," Geithner said, a sentiment that other G20 countries
similarly expressed ahead of the meeting.
The London gathering will set an agenda for a meeting in
Pittsburgh on Sept. 24-25 of political leaders from the same
countries, drawing the old-line industrial powers and key
emerging-market economies into a closer accord.
Geithner said the Obama administration remained committed
to enacting fundamental reforms that will strengthen the
financial system and lessen risks of a repeat of the crisis
that ravaged Americans' job prospects and incomes over the past
two years and said he hoped other countries also stood firm.
"We have moved exceptionally early in the United States to
put out broad proposals and detailed legislative language on
comprehensive reforms to create a system that provides much
stronger consumer protection and the prospect of a much more
stable and less vulnerable financial system," he said.
"It's very important to us that the rest of the world move
too," Geithner said. "These are global markets and our reforms
here will not be effective...unless they're complemented by
sufficiently ambitious efforts by the rest of the other major
(Additional reporting by Emily Kaiser; Editing by Leslie