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.
