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U.S. Deputy Treasury Secretary Neal Wolin said European leaders have made advances in addressing the region’s debt crisis while they have more work ahead.
“They have made important strides and we’re encouraged by the progress that they have made,” Wolin said in an interview with Bloomberg Television today. “They have additional work to do.”
Treasury Secretary Timothy F. Geithner said at a meeting of Group of 20 finance ministers last weekend that Europe needs a “substantial financial firewall” to support the region’s recovery efforts. In a two-day summit that began yesterday in Brussels, euro-area leaders agreed to provide capital faster for a planned permanent bailout fund in a concession to international pressure to strengthen the region’s defenses against the debt crisis.
On U.S. efforts to revamp financial regulations, Wolin said the Volcker rule ban on proprietary trading needs to be clear while allowing market-making and “appropriate hedging activity.”
The “basic idea” of the rule is that banks “should not be doing these riskier activities,” Wolin said. “They shouldn’t be engaged in proprietary trading on their own balance sheet, they shouldn’t be investing in riskier funds.”
In an interview earlier today on CNBC, Wolin said there’s no evidence that the Dodd-Frank financial overhaul law has had any “negative effect” on the financial system. He also said the costs of implementing Dodd-Frank are a “pittance” compared with those associated with the financial crisis.
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