Excerpts of U.S. Treasury Secretary Tim Geithner’s Remarks to the International Monetary Conference given on June 6, 2011, in Atlanta, Georgia
Jun 6, 2011
The following are excerpts of U.S. Treasury Secretary Tim Geithner’s Remarks to the International Monetary Conference Given on June 6, 2011 in Atlanta, Georgia.
“We are committed to building a more level playing field internationally, as we move ahead with reforms in the United States.
We don’t want to see another race to the bottom around the world. As we act to contain risk in the US, we want to minimize the chances that it simply moves to other markets around the world.
The United Kingdom’s experiment in a strategy of “light touch” regulation to attract business to London away from New York and Frankfurt ended tragically. That should be a cautionary note for other countries deciding whether to try to take advantage of the rise in standards in the United States.
But it is important to note that the strength of the United States financial system in the decades that followed the Great Depression was that we had the highest standards for disclosure and investor protection, we had the strongest protections for depositors and against money laundering, and we had the best exchanges. We did not lower our sights to match the more limited ambitions of others. We knew we would be more vulnerable if we did.
So we will do what we need to do to make the United States financial system stronger. We will do so carefully. And as we do it, we will bring the world with us.”
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“Now, as we work with our international counterparts on this range of issues, we need to develop a global margin standard.
Just as we have global minimum standards for bank capital – expressed in a tangible international agreement – we need global minimum standards for margins on uncleared derivatives trades.
Without international consensus, the broader cause of central clearing will be undermined. Risk in derivatives will become concentrated in those jurisdictions with the least oversight. This is a recipe for another crisis.
A global approach to margin will help prevent regulatory arbitrage and a “race to the bottom.” It will make our global financial system safer and stronger.”