US TREASURY secretary Timothy Geithner has played down talk of transatlantic tensions ahead of next month's G20 summit, saying the US and Europe were in "broad agreement" over financial market reform.
Mr Geithner ended his trip to Europe with praise for the euro zone rescue fund: it contained the “right elements” that required decisive action to put it to work.
In Berlin, the top US finance official and his German counterpart, Wolfgang Schäuble, agreed to disagree on the detail of finance market reform.
“The US and Europe are in broad agreement on the importance of putting in place more conservative constraints on risk-taking [and] more conservative capital requirement,” said Mr Geithner. For regulators to do their job properly it was essential to bring “more transparency and disclosure to derivatives markets”.
“These are global markets; you need common standards,” he said. “You don’t want to just let risk move outside the scope of regulation.”
That was seen as a discreet, critical nod towards Germany’s national ban on speculative trades last week, including naked short selling.
Mr Schäuble, Germany’s finance minister, defended the national ban, saying Germany had been unable to wait until a European agreement in the autumn.
“We’ve done our national homework on this and have to keep moving forward,” he said.
The Berlin meeting followed a stopover in Frankfurt where Mr Geithner met European Central Bank (ECB) president Jean-Claude Trichet as well as his likely successor, Bundesbank president Axel Weber.
The euro staged a rebound yesterday – after days of unyielding pressure – as the Chinese authorities denied a report that Beijing was reviewing its holdings of European sovereign debt.
Although European and US equity markets continued to rise, there were conflicting signals from the ECB about the implications of the turmoil sparked by the Greek debt emergency.
ECB executive board member José Manuel Gonzalez-Paramo said the euro zone could not afford another country to repeat Greece’s deception over the scale of its deficit.
However, the chiefs of the French and Austrian central banks adopted a positive stance on the currency’s decline, saying it was benefiting exporters.
