WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner said on Monday that all Group of 20 member countries agree a strong regulatory response is needed to the crisis wracking the global financial system.
In an interview with the Financial Times newspaper, Geithner said the “U.S. has a huge interest in acting quickly and comprehensively to use this opportunity to develop an international consensus on how to make the system more robust and stable.”
Political leaders and finance minister from the G20 industrialized and emerging economies will hold a one-day summit in London on Thursday to discuss how to respond to the current crisis that has driven much of the global economy into recession.
Geithner said in the interview he felt that not only did the G20 agree a strong regulatory response was required, but they were also in unison on the broad shape the overhaul should take.
Regulation should be a sovereign issue, Geithner said, adding he saw no need for a global systemic risk regulator.
“The home country authority has to have responsibility for consolidated supervision of its institutions,” Geithner said in the interview.
He said the Obama administration was specially interested in toughening capital requirements for key financial institutions in an effort to reduce the risk of repeating the current crisis.
“We have a clear imperative to reform capital requirements,” Geithner told the FT. “I think the basic cushions in the system — capital, liquidity, reserves — were too thin and procyclical in their effects.”