Treasury Secretary Timothy Geithner said Wednesday, May 26, that financial markets want to see euro zone countries put their $1 trillion standby package into place. The package is designed to assist and stabilize European currency.
Reuters reports that Geithner, on a visit to London, also urged Europeans to work for a globally consistent approach to financial reform as the European Union said it might go it alone with a crisis levy on banks.
According to the news service, after talks with his British counterpart, George Osborne, Geithner said of the EU plan to support indebted states: “It’s a good program (and) has got all the right elements. What markets want to see is action.”
The fund would provide heavily conditioned loans to euro zone governments that had difficulty borrowing on capital markets after a separate bailout for Greece failed to calm fears of a sovereign debt default in southern European countries, Reuters reports.
European shares rallied by 3% from Tuesday’s nine-month lows and Wall Street was up nearly 1% in afternoon trading, but the euro remained under pressure amid continuing signs of banks’ reluctance to lend to euro zone counterparts exposed to south European sovereign debt.
Reuters notes that Geithner’s stress on coordination of new regulation appeared aimed chiefly at Germany, Europe’s biggest economy, which stunned markets and angered EU partners by unilaterally banning some speculative financial trades last week, then widening that ban on Tuesday.