Geithner meets with regulators on bank plans

WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner was meeting on Friday with top U.S. banking regulators who would have authority over a fast-developing government plan to support the financial system.

President Barack Obama (R) meets with Treasury Secretary Timothy Geithner in the Oval Office at the White House in Washington, January 29, 2009. REUTERS/Jim Young

The Treasury said Geithner would meet with Federal Reserve Chairman Ben Bernanke, Federal Deposit Insurance Corp Chairman Sheila Bair and Comptroller of the Currency John Dugan “to discuss financial and regulatory reform.”

The Obama administration is working on a comprehensive plan to stabilize the banking sector and revive lending to restore U.S. growth. It is expected to roll out a menu of options tailored to banks’ individual needs, according to a source familiar with administration thinking.

These could include a “bad bank” to soak up distressed assets from bank balance sheets, government guarantees for certain asset portfolios and continued capital injections by the government in exchange for common shares.

The Treasury’s statement did not provide any more detail, nor timing, on Geithner’s meeting with the top regulators.

The Fed has been active in providing asset guarantees and creating lending facilities aimed at restoring liquidity to credit markets, while the FDIC chairman is said to have been pushing to run an entity that would take over bad debts from banks. The comptroller’s office has been a key determiner of which banks receive government capital injections.

The Treasury also said Geithner has been making introductory telephone calls to foreign finance ministers and discussing the global economic situation, fiscal stimulus efforts and unlocking credit markets. These included conversations with his counterparts in Britain, France, Germany, Australia, Singapore, Russia and Japan.

Geithner will meet them in person at the Group of Seven finance ministers and central bank governors’ meeting in Rome on February 13-14, the Treasury said.

In a discussion with UK Chancellor of the Exchequer Alistair Darling, the Treasury said: “They agreed that significant international action is necessary for global growth to regain its footing.”

The Treasury statement made no mention of currencies being among the topics Geithner discussed with foreign finance ministers.

Reporting by David Lawder; Editing by Dan Grebler