Geithner Rallies G7 Support of Rescue Plan, Wall Street Upset
Treasury Secretary Timothy Geithner on Friday attended the G7 Finance Minsters and Central Bank Governors meeting in Rome, where he assured the group of leaders the United States is moving swiftly to revive the economy by way of its $787 billion economic stimulus package and bank stabilization plan -- the details of which are expected to be presented soon. Geithner urged other countries to take bold actions as well. "These are global challenges and it is imperative that we work together to address them," Geithner said in a statement following the meeting. "Effective global response will require sustained action by governments working with the international financial institution." He said G7 countries all realize the gravity of the situation. "The stabilization of the global economy and financial markets remains our highest priority," the G7 wrote in a joint statement Friday. "We have collectively taken exceptional measures to address these challenges and we reaffirm our commitment to act together..." Although, Geithner came under nation-wide fire last week after presenting an outline of the United States' financial-system rescue plan that's currently in the works, because he gave very few details of that plan. The announcement to revive the financial system actually sent stocks diving, falling over the week by the most since November. “It is a comprehensive plan, the intent is there, the will is there,” Bank of Canada governor Mark Carney said, according to the IrishTimes. “The question is implementation and execution.” Finance ministers, central bankers and investors world-wide are looking to Geithner and his team to provide specifics on the plan. The Treasury secretary reportedly sketched out the bank plan for his colleagues at the meeting in Rome and guaranteed the details would be filled in soon. He appeared to win the confidence of some leaders, according to CNNMoney.com. But the story was different on the home front, where Wall Street is all but comfortable with the plan. People close to the situation told the Financial Times that financial groups were frustrated by the administration's decision not to hold detailed talks with the industry before releasing its financial rescue plan. Administration officials said the announcement was meant to serve as a framework, and stressed that industry "stakeholders" would be consulted as details were hashed out. Banks concerns, however, were bolstered last week when Geithner canceled a meeting with Wall Street chiefs, citing "scheduling problems." Wall Street is expected to lobby the Obama administration to loosen its plans for stringent reviews of banks’ financial health -- referred to as stress tests -- and capital injections that could leave the government as a large shareholder in many of those institutions, the Financial Times said. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.