The European debt crisis represents the "biggest risk to our economy," US Treasury Secretary Timothy Geithner told a Congressional committee Wednesday.
"The economic recession in Europe is hurting economic growth around the world, and the ongoing financial stress is causing a general tightening of financial conditions, exacerbating the global slowdown," Geithner said in prepared remarks.
In the last two years, financial institutions in the United States have "significantly reduced" their exposure to the more vulnerable economies in Europe, according to Geithner's statement.
European leaders are instituting long-term economic reforms to improve their financial systems, Geithner said.
"We can't want this more than them (Europe)," Geithner said in response to a question from a committee member. He said that he has continued to push the Europeans "to move more quickly and credibly" to enact those reforms.
Geithner defended himself against accusations that he should have done more to alert Congress about the Libor rate-rigging scandal rocking the British banking industry when he became aware of it as head of the New York branch of the US Federal Reserve.
Geithner said he did the "necessary and appropriate thing" very early in the process by briefing then President George W. Bush's administration in May of 2008 on his concerns about Libor being "vulnerable to misreporting."
Barclays Bank was hit with a $453-million (373 million euros) fine last month for playing a role in manipulating the London Interbank Offered Rate, the daily interest rate benchmark issued by the British Bankers Association which is known as Libor.
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