Geithner: Financial rules have strengthened system

AP News
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Posted: Feb 02, 2012 5:38 PM
Geithner: Financial rules have strengthened system

Treasury Secretary Timothy Geithner is pushing back against critics of the 2010 financial overhaul, saying tighter regulations are making the financial system stronger and safer.

Geithner said Thursday that banks now face much tougher limits on how much risk they can take and new rules on how much capital they must hold to guard against losses.

"No financial system is invulnerable to crisis and we still have a lot of unfinished business on the path to reform," Geithner said during a news conference. "But the American financial system is much less vulnerable than it was."

Geithner also said the administration hopes to make progress this year in its efforts to wind down mortgage giants Fannie Mae and Freddie Mac.

He said a white paper the administration put out a year ago outlined several options and the administration hopes to provide more details around various approaches this spring, working with the leaders of the financial committees in the House and Senate to advance the effort.

He said the administration's goal is to wind down Fannie and Freddie and bring private capital back into the housing market. But he doesn't expect Congress to act this year.

"We could be surprised, but I think that is unlikely," he said.