Wednesday, March 11, 2009
Mr. Kahn I expect you to sell
By Rebecca Christie
March 11 (Bloomberg)
Treasury Secretary Timothy Geithner urged the Group of 20 nations to take “forceful” actions to arrest the financial crisis, and proposed a quarterly assessment of each country’s steps by the International Monetary Fund.
“This is a global crisis which requires a global response,” Geithner said in a statement in Washington. “G-20 countries must take strong macroeconomic and financial sector measures.” A “reasonable benchmark” is the IMF’s recommendation for stimulus equivalent to 2 percent of a nation’s gross domestic product, Geithner said.
Geithner leaves tomorrow for a meeting of finance ministers from 20 of the world’s industrial and developing nations to lay the groundwork for a summit of government leaders on April 2 in London.
The Treasury secretary also proposed expanding by $500 billion the IMF’s capacity to borrow extra funds from some of its member nations. The fund currently is able to borrow about $50 billion through special supplementary financing arrangements. The U.S. contribution is about 20 percent, indicating a possible new commitment of about $100 billion, Geithner told reporters today.
The Obama administration soon will also push Congress for legislation that allows the IMF to “mobilize” its stockpile of gold, Geithner said today. Congress would need to approve the IMF funding expansion, although it wouldn’t count against the budget deficit, he said.