• 2010
• 2009
• 2008
• 2007
• 2006
• 2005

What is RSS?  

Sky News has spoken to US Treasury Secretary Timothy Geithner at the G20 summit of world finance leaders at St Andrews in Scotland and has said that he is "not prepared" to support Gordon Brown's plan for a financial transaction levy.

In an interview with Sky’s Jeff Randall this afternoon, Geithner dealt what could be a fatal blow to the Prime Minister’s plans for G20 leaders to consider a tax on financial transactions to protect taxpayers and make banks more accountable. The money collected could be held in a global fund to bail out failed banks, Mr Brown suggested, but would only work if adopted globally. Mr Geithner rejected the proposal when asked by Jeff Randall if he supported the proposal. He said: “That’s not something that we’re prepared to support, but again I think we all share a basic interest in trying to make sure we build a system where taxpayers aren’t exposed in the future and where the financial institutions are bearing the consequences of their mistakes, that they’re responsible for the risks they take.”  

Full Transcript:

Jeff Randall: This morning the UK Prime Minister proposed a financial transaction tax on the banks. You won’t swallow that will you? It will damage Wall Street.

Timothy Geithner: We’re all committed to a simple basic proposition which is, we want to work together to create a more stable system where tax payers are not exposed in the future to the risk of loss, and where banks and investors don’t operate with the expectation that governments are going to be there in the future to bail them out. That’s a basic simple proposition. Now we propose in the United States a way to achieve that by making sure that if in the future the government is exposed to any risk of loss that we re-coup that loss by assessing a fee on the liabilities of banks. Now we think that approach helps reduces the risk of moral hazard, it’s fair to the tax payer and doesn’t put us in a position where retail investors and pension funds are the ones bearing the burdens of that cost.

JR: But you’re not in favour of a day by day transaction tax?

TG: That’s not something that we’re prepared to support, but again I think we all share a basic interest in trying to make sure we build a system where tax payers aren't exposed in the future and where the financial institutions are bearing the consequences of their mistakes, that they're responsible for the risks they take.

JR: Now there was some bad news in the United States this week with unemployment up to more than 10%, 15 million Americans without a job. I put it to you that you’ve rescued the banks but you haven’t rescued the people.

TG: No I wouldn’t say that, I would say that we’ve achieved a very important thing which is that you’re now seeing an economy that is growing again and that’s happening not just in the United States but it’s happening around the world. Just look back to where we were, if you think back a year ago, you had basically businesses that had come to a stop, confidence collapse, trade fall off a cliff, deep concerns about the value of people’s savings, financial systems on the edge of collapse. And what we’ve done is very important, which is in a relatively short period of time given the magnitude of the crisis, we now have an economy that’s growing again. This is a very tough economy still, unemployment is high, it’s unexpectedly high and it’s still rising and it just underscores the importance of the task ahead still. We need to make sure we’re still working together to reinforce growth, put people back to work, bring jobs down, strengthen confidence and that’s going to take more work.

JR: Is this going to be a jobless recovery?

TG: Again our emphasis, and I think the big test for all of us is that are we getting growth back that’s sustainable, that gets people back to work, that makes businesses confident so they can invest again, and again that’s going to take continued efforts by governments not just the United States and around the world, but we’re making some progress.

JR: Your star economist, the Nobel Prize winner Paul Krugman said recently in his column that the US Government stimulus has been too cautious, it’s been a series of half measures and this will haunt the Democrats for years to come, he’s right isn’t he?

TG: No I don’t agree with that. What the President did with the congress and this was very important, is put in place really the most powerful, the largest recovery programme we’ve seen in about 50 years. And it was designed to work over two years, you have more than half of those measures still ahead of us and I actually think you’re seeing growth come back stronger and more quickly than many of us thought just going back six months ago. But again the congress [inaudible] the law on Friday, some expansion of benefits for the unemployed, some expanded tax benefits to businesses and we’re going to keep at this until we get growth back on track and American people back to work.

JR: What about the bankers themselves, the demons in all this, the Europeans are very keen on reining back the bankers, putting a cap on their bonuses. It seems to us that in the US it’s business as usual, these guys have got away with it, where’s the beef in your action?

TG: No we’re not going to let that happen, and if you look at what we’ve done already, I believe in fact that we’re ahead of the rest of the world. We have put in place pretty tough standards to change the way compensation practices are done in the financial sector because we all share this basic imperative which is that we can’t let the financial system go back to the way it was, we can’t have a situation where people are paid to take risk but they don’t bear the responsibility for those mistakes. That’s something we all share. And we moved actually very early ahead of most countries, the President proposed in February of this year a set of conference reforms to change this, congress has already passed legislation through one house that would bring greater disclosure, give more leverage to share-holders to constrain these things. You saw the federal reserve of the United States put out very strong standards to change compensation. We work with countries around the world to put in place broad standards for reforming these changes. We’re not going to let it go back to the way it was.

JR: You as a Government have brought in an unprecedented package of stimuli, fiscal and monetary, there comes a time doesn’t there, when that tap has to be turned off. You said in your communiqué today, it is too early to start to lean against recovery. That’s not what the Conservative opposition in Britain are saying, they’re saying we need belt tightening now, are you saying they’re wrong?

TG: I think one of the most important things you see in the statement from the G20 today which is a very broad-based consensus around the world, you can see it in continental Europe, you can see it in China, in India and Brazil and certainly the United States, that we are at the stage where growth in re-starting but we don’t have the conditions in place for a sustained recovery and that’s gong to require continued efforts to get businesses growing again, to get people back to work, get these credit markets opening up again and I didn’t really hear anyone around the table suggest today that we can now move to restraint on the policy side. We’re going to have to do that as the economy recovers but right now the dominant challenge is growth.

JR: Final question Secretary Geithner, the debt in the US is well north of a trillion dollars, you don’t really have much more room for another fiscal surge, at some point taxes will have to go up won’t they?

TG: Actually the deficits are slightly less than we anticipated if you look back earlier in the year, but they’re too high and we’re going to have to bring them down as growth recovers but that’s something we can do. Again the biggest challenge is to get the economy growing again and get people back to work and that’s what we’re going to do.



- Ends -

For further information, please contact:

Charlotte Dixon

Publicity Manager, Sky News

T. 07824 824834

E. charlotte.dixon@bskyb.com

 


Notes to Editors:

 

Since its launch in 1989, Sky News has established itself as a formidable and innovative force in the world of news broadcasting. It now provides news to around 145 million people in 36 countries in Europe alone, with distribution across Africa, the Middle East and Asia

.

 

Valued for fairness, balance and journalistic objectivity by both viewers and regulators, the award-winning channel has also earned a reputation for the speed of its 24-hour coverage and flexibility in reporting live news – first.

 

In addition to its status as one of Europe's leading 24 hour news channels, skynews.com is one of the fastest growing websites on the continent and reaches way beyond its eight average and half million monthly unique users.  It serves text and video to Britain’s commercial radio websites, to giant animating billboards in all major railway stations in the UK

seen by 56 million commuters a fortnight, to passengers on Virgin Atlantic flights, and more than 500,000 iPhone users via the most downloaded news application in the country.

In March 2009 Sky News Radio became the sole provider of national and international news to all commercial stations in the UK

– reaching around 31 million listeners in total – when it took over the contract to supply IRN stations, in addition to its existing clients.

 

Sky News won a Golden Nymph at the 2009 Monte Carlo Television Festival for Best 24 Hour News Programme for its coverage of the Mumbai terror attacks. Sky News was also named Best News Service at the Broadcast Digital Awards 2009 and Skynews.com won the Association of Online Publishers award for website of the year, 2008.

                                                                                          

back to the article list...

• Help & accessibility |
• RSS |
• Site map |
• Privacy statement |
• Terms & conditions |
• Designed by oneshoe