WASHINGTON – Treasury Secretary Timothy Geithner on Monday urged top bankers to accept tough new financial regulations passed in response to the 2008 financial crisis, instead of pressuring Congress to weaken them.
Speaking at a banking conference in Atlanta, Geithner criticized banking executives who are supporting Republican efforts to block resources needed to implement the law. The measure was passed last year when Democrats controlled both chambers of Congress.
Geithner said the strongest and best managed firms have the most to lose if the regulations are weakened. That’s because their competitors, including foreign banks, would benefit the most from loopholes and hurt the entire financial system.
“We can’t allow loopholes, gaps and poorly managed risk to take hold and undermine the fundamental strength of our reforms,” Geithner told the bankers attending a conference in Atlanta. A text of his remarks was released in Washington.
Geithner said that the top U.S. financial institutions “should be champions, not opponents of getting strong capable people to lead and staff the oversight bodies.”
He called for establishing global standards for trading derivatives and warned that countries should not engage in a “race to the bottom” in setting standards for financial companies.
One of the advantages the United States held following the Great Depression of the 1930s, Geithner said, was in setting high standards for Wall Street and the banking system. He said the administration was committed to following that approach this time as well.
“We will do what we need to do to make the United States financial system stronger,” Geithner said. “We will do so carefully. And as we do it, we will bring the world with us.”