Almost a year since the collapse of Lehman Brothers triggered a financial panic that tipped the world into a deep recession; Mr Geithner said it was time to move from crisis response to recovery.
Pointing to evidence of a healing in financial markets, which only a few months ago had been paralysed by a retreat from risk, Mr Geithner said the US would allow its guarantee for the $2,500bn money market mutual fund industry to expire on schedule this month.
He also backed a review by the Federal Deposit Insurance Corporation that is likely to lead to funding guarantees for banks either being ended completely or restricted to emergency cases. “As we enter this new phase we must begin winding down some of the extraordinary support we put in place for the financial system,” he said. He pointed to success in replacing government capital invested in banks with private capital – a shift officials say rebuts Republican claims that the Obama administration favours big government solutions to problems.
Read more here: US starts to unwind state bank support