Global recovery

WASHINGTON (AP) — Treasury Secretary Timothy Geithner said Tuesday that the global recession is easing but serious risks remain to a prolonged recovery.

Geithner told reporters there were a number of signs that conditions are getting better, including that 10 of the largest U.S. banks have been approved to repay $68 billion in government bailout money.

But the current financial crisis "took a long time to build up and it will take a long time to get through it," he said. Geithner spoke in advance of meetings of finance ministers from the Group of Eight major industrial countries scheduled for Friday and Saturday in Italy.

The meetings will serve as a stock-taking exercise where the G-8 countries will assess progress made since President Barack Obama and other world leaders met in London in early April, he said. They also will help prepare the economic agenda for the G-8 summit to be held in Italy next month.

Geithner said he believed the "force of the global storm is receding a bit." He noted that U.S. financial institutions have been able to raise billions of dollars in capital in recent weeks through stock sales, and that 10 banks received the government's permission Tuesday to repay money received from the $700 billion bailout program.

But the U.S. and other countries have more work to do to build a sustainable economic recovery and establish the necessary financial reforms to make a repeat of the crisis less likely, he said.

Geithner said he would discuss with the other finance ministers the financial reforms that the Obama administration will be pushing to get adopted in the U.S.

The administration is expected to lay out its full regulatory reform agenda next week. It already has discussed some aspects of that program, including creation of a systemic risk regulator and better oversight of trading in complex financial products.

The Wall Street Journal reported Tuesday that the administration wants European nations to put their banks through more rigorous public stress tests similar to the type that were conducted on 19 of America's biggest banks.

Geithner, however, sidestepped questions about whether he would push for the Europeans to adopt tougher stress tests for their own banks.

"I will explain what we have done here," Geithner said. "It is important that we lay out and explain what we have done."

The meeting of G-8 finance ministers will include officials from the U.S., Japan, Germany, France, Britain, Italy, Canada and Russia.



by the associated press