Los Angeles 10/6/2010 9:53:51 PM
News / Finance

Problems With Currency Could Risk Global Recovery, Says Treasury Secretary

Timothy Geithner, Treasury Secretary took a harsher stance Wednesday on currency issues, saying that the global economy could be at risk unless developing nations were more flexible with their currencies – the remarks appear particularly intended for ears in China.

Without actually mentioning China, Geithner could have only had China in mind when commenting that keeping tight controls over currency hazard "either causing inflation and asset bubbles in emerging economies, or else depressing consumption growth and intensifying short-term distortions in favor of exports," he said in an address at Washington’s Brookings Institute.

He further stated that the US fully intends to “convince” nations who were overly controlling of their currencies to become more flexible and that the issue will be central in the upcoming round of IMF meetings.

"It is not good for the world for the burden of solving this problem to rest on the shoulders of the United States," Geithner commented, further saying that the US would much prefer the problem solving to be on a multilateral level, with all parties involved taking decision which are mutually agreeable.

Geithner didn’t go so far as to say he would be willing to think about coordinated action with other countries to try and force nations that are keeping their currencies inflexible to ease up on controls.

He also talked about the state of the US economy in positive terms, saying that it was "healing more quickly than any of us thought."