Oct. 5 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner will tell lawmakers that the European financial crisis is increasing the risks to global growth, according to testimony prepared for delivery tomorrow.
“Our direct financial exposure to those governments and their financial institutions is quite small, but Europe is so large and so closely integrated with the U.S. and world economies that a severe crisis in Europe could cause significant damage by undermining confidence and weakening demand,” Geithner says in testimony to the House Financial Services Committee.
Geithner calls for a more “powerful financial backstop” for European banks and government borrowers, one that is “conditioned on policy actions that credibly address the underlying causes of concern.”
His remarks, obtained by Bloomberg News, come in testimony for hearings before the House Financial Services Committee and Senate Banking Committee on the previously released annual report of the Financial Stability Oversight Council. The FSOC next meets on Oct. 11.
He calls on Congress to take steps to strengthen the U.S. economy and makes a pitch for President Barack Obama’s $447 billion jobs plan.
--Editors: Chris Wellisz, Gail DeGeorge
To contact the reporters on this story: Cheyenne Hopkins at Chopkins19@bloomberg.net; Phil Mattingly in Washington at firstname.lastname@example.org.
To contact the editor responsible for this story: Christopher Wellisz at email@example.com