US Treasury Department secretary Tim Geithner, in his testimony before the Senate Banking Committee today, says markets are recovering and private capital is flowing once more. He cites narrowed spreads on corporate and municipal bonds, smaller risk premiums in short-term, inter-banck markets and decreased credit protection costs at the largest US banks as indicators of said recovery. But initial signs of recovery are not enough, as Geither goes on to outline continued objectives in the Administration's plans to turn the tentative recovery into long-term growth. In the immediate short term, President Barack Obama plans to keep mortgage rates low as traffic in asset-backed securities picks up and banks must become more transparent, he says. The Administration's focus in coming weeks will remain on assisting smaller banks in cleaning up so-called "legacy" (or "toxic" to those less sensitive) loans and reducing systemic risk in the broader banking system. New regulations will prevent large financial institution from another collapse, with distressed asset programs to start in six weeks, Geithner says. "Stability is not enough," he said. "We need a financial system that is not deepening or lengthening the recession, and once the conditions for recovery are in place, we need a financial system that is able to provide credit on the scale that a growing economy requires." Write to Diana Golobay.