*Geithner still sees financial reform passing
*Need to set example or see other countries go own way
*Don't let banks thwart process, Geithner urges
(Recasts, adds quotes, details, background)
By Glenn Somerville
WASHINGTON, March 12 A day after U.S. Senate
bipartisan talks on financial reform collapsed, Treasury
Secretary Timothy Geithner sought to revive hope that Congress
can still complete a bill to overhaul financial rules.
It is in the U.S. domestic interest to make the financial
system more stable and to show others that the United States
can set an example for action in the wake of the financial
crisis, he told a U.S. Export-Import Bank conference.
"It is very important to our economic interests that we
play a leadership role in shaping the basic reform structure
around the world," Geithner said.
"If America cannot demonstrate it's able to act and reform
our markets here, then other countries are going to decide to
go their own way on reform."
On Thursday, Senate Banking Committee Chairman Christopher
Dodd said an effort to reach a bipartisan pact with Republican
Sen. Bob Corker on a financial reform bill was over. Dodd said
he would unveil his own proposals on Monday.
Geithner showed no dismay over the end of bipartisan
efforts in the Senate to shape a bill, which some analysts had
described as a setback.
NEED TO MOVE QUICKLY
"We've got a big imperative to try to get a strong bill in
place today and I'm very confident that we're going to be able
to do that," Geithner said. He added: "I think you're seeing
Sen. Dodd run a very effective process trying to build
consensus on a strong bill and I hope we get this done
The U.S. Treasury chief directed strong words toward the
banking industry when asked what exporters might be able to do
to expedite the legislative process to set clearer rules for
behavior by financial firms.
"I would say 'Don't leave it to the banks,'" Geithner
replied, noting that businesses and consumers were "innocent
victims" of the financial crisis. "They suffered from a bunch
of terribly unacceptable practices by parts of the financial
The U.S. economy is emerging from recession more quickly
than many of its trading partners and now has an opportunity to
make investments in education and other areas to become more
competitive, Geithner said.
He cautioned that while the economy was gaining momentum,
it needs time to recover fully from recession and said there
were still problems stemming from the fact that countries like
China are overly reliant on exporting to boost their growth.
"If you care about exports, as the president does, you
understand it's about opening markets to American producers ...
it's about making sure that countries around the world are
moving from the kind of export investment-led strategies of the
past -- countries like China -- and are moving more toward
strategies that rely more on domestic consumption and domestic
demand-led growth," Geithner said.
(Reporting by Glenn Somerville and Doug Palmer, Editing by Dan