Geithner's formula for post-crisis optimism

• Source: caijing.com.cn
• [13:52 October 14 2009]
• Comments

Plans to reform financial supervision in the United States – ground zero for the global financial crisis -- still face challenges despite early signs of economic recovery.

Tim Geithner

For example, the US government deficit is expected to swell to US$ 9 trillion over the next 10 years as a result of huge government stimulus and corporate bailout packages. Proposed national health care reform is another potentially costly project.

Beyond these challenges, countries around the world are trying to root out economic dilemmas by diminishing risks and adjusting policies as part of a post-crisis reconstruction. They're also pushing for a more efficient framework to coordinate global financial supervision.

But how are US officials confronting these issues? What are they doing to recover, reform, coordinate and rebalance? And what are Washington's positions on issues of concern to China, such as the safety of foreign reserves and international financial institution reform?

These and other questions were on a list posed by Caijing's chief editor, Hu Shuli, during a discussion with US Treasury Secretary Timothy Geithner during the recent 2009 annual conference of the World Bank and the International Monetary Fund (IMF). Here are excerpts from the interview:

Global Reserve Currency

A key topic at the IMF conference was whether the US dollar should be used as an international reserve currency, and whether it can be replaced. Unofficial discussions were reportedly held during the meeting between the so-called BRIC nations – Brazil, Russia, India and China – and global oil producers about the possibility of dumping the US dollar for other currencies in future oil transactions. The news triggered a fall in the dollar's value.