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New treasury chief fares better on world stage

 U.S. Federal Reserve Chairman Ben Bernanke, left, U.S. Treasury Secretary Timothy Geithner, center, and U.S. Deputy Assistant Secretary of Treasury M...
 U.S. Federal Reserve Chairman Ben Bernanke, left, U.S. Treasury Secretary Timothy Geithner, center, and U.S. Deputy Assistant Secretary of Treasury M...
 U.S. Federal Reserve Chairman Ben Bernanke, left, U.S. Treasury Secretary Timothy Geithner, second from left, and U.S. Deputy Assistant Secretary of ...
 U.S. Treasury Secretary Timothy Geithner meets journalists at the end of the G-7 (Group of Seven) Finance Ministers and Central Bank Governors meetin...
 U.S. Treasury Secretary Timothy Geithner meets journalists at the end of the G-7 (Group of Seven) Finance Ministers and Central Bank Governors meetin...
 U.S. Treasury Secretary Timothy Geithner meets journalists at the end of the G-7 (Group of Seven) Finance Ministers and Central Bank Governors meetin...

ITALY G7

U.S. Federal Reserve Chairman Ben Bernanke, left, U.S. Treasury Secretary Timothy Geithner, center, and U.S. Deputy Assistant Secretary of Treasury M...

ITALY G7

U.S. Federal Reserve Chairman Ben Bernanke, left, U.S. Treasury Secretary Timothy Geithner, center, and U.S. Deputy Assistant Secretary of Treasury M...

ITALY G7

U.S. Federal Reserve Chairman Ben Bernanke, left, U.S. Treasury Secretary Timothy Geithner, second from left, and U.S. Deputy Assistant Secretary of ...

ITALY G-7

U.S. Treasury Secretary Timothy Geithner meets journalists at the end of the G-7 (Group of Seven) Finance Ministers and Central Bank Governors meetin...

ITALY G-7

U.S. Treasury Secretary Timothy Geithner meets journalists at the end of the G-7 (Group of Seven) Finance Ministers and Central Bank Governors meetin...

ITALY G-7

U.S. Treasury Secretary Timothy Geithner meets journalists at the end of the G-7 (Group of Seven) Finance Ministers and Central Bank Governors meetin...

This was no Roman holiday for Timothy Geithner.
But after crashing global markets with a botched rollout of a bank rescue plan, the new U.S. treasury secretary earned better reviews from global finance officials meeting in the Eternal City. Now comes the hard part _ putting the plan into place.
Geithner had appeared stilted and tentative Tuesday in Washington when he read a speech outlining the new bank program. He was more assured Saturday in Rome at a news conference following two days of talks among finance officials of the Group of Seven major industrial countries.
"The world is facing enormous challenges. Governments around the world are acting with greater force and urgency to address these challenges," he said. The slight, boyish-looking 47-year-old is the public face of the Obama administration's economic team as it confronts the worst financial crisis in seven decades.
Geithner doesn't project the air of a master of the universe like his predecessor, Henry Paulson, who spent three decades rising to the top of legendary investment bank Goldman Sachs.
Rather it is the air of a diffident government bureaucrat, which Geithner was for more than two decades. He advanced through the ranks at the Treasury Department, starting as a civil servant and then moving into bigger and bigger jobs as both Republican and Democratic administrations recognized his skills in dealing with complex international issues.
He helped direct the Clinton administration's response to the 1997-98 Asian currency crisis. As president of the New York Federal Reserve Bank, Geithner was instrumental in shaping the Bush administration's responses to the unfolding credit crisis.
That immediate past can make Geithner's current job a bit awkward, given that the new administration is overhauling the Bush-Paulson approach, which critics say demanded too little from the banks in return for the billions of dollars in government bailout support.
The reworking of the $700 billion bailout that Geithner described Tuesday means tougher requirements on the banks to ensure they use the government aid to increase loans to consumers and businesses. It also will rely on creative partnerships with the Federal Reserve and private sector to boost total support to as much as $2 trillion. The administration hopes that is enough to finally get banks to resume more normal lending.
A central part of the plan is an effort to assemble up to $1 trillion in resources to purchase toxic assets and remove them from banks' balance sheets. The plan so lacked specifics that financial markets tanked, sending the Dow Jones industrial average plunging by 382 points Tuesday.
Geithner's explanations about the scant details were, by all accounts, not much better in the private meetings in Rome. But he had a better audience: finance ministers who are in the same fix he is in. They, too, are trying desperately to figure a way to deal with billions of dollars in losses being carried on banks' books without sending their governments' balance sheets even further into the red.
For that reason, the finance officials were more willing to give Geithner and the Obama team time to develop a program that will attract public investment to be used to purchase those toxic assets.
In contrast to the cautious, hesitant official who awkwardly read Tuesday's speech from a TelePrompTer, Geithner was described as being at ease and well-versed in handling questions in the financial officials' meetings. While it was his first G-7 as treasury secretary, he had spent years in his previous Treasury stint preparing others for such sessions. Many officials called him "Tim."
"He participated actively in the debates on all points on the agenda," said French Finance Minister Christine Lagarde. "We welcomed him warmly."
Of course the true test is not how polished President Barack Obama's chief economic spokesman comes off selling the plan, but how well the plan works. On that, the financial officials in Rome were more guarded, telling reporters not to expect any significant turnaround for the troubled global economy until late this year at the earliest.
Vittorio Grillo, an Italian official, said the hope is that all the government's economic stimulus efforts and attempts to fix the banking problems will be able to "gradually" turn the global economy around.
____
Associated Press writers Ariel David and Colleen Barry contributed to this report.


Updated : 2021-10-25 23:00 GMT+08:00