Tuesday, September 27

Geithner seeks to calm fears on Europe

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CNBC's Steve Liesman discusses some of the key things that Secretary Timothy Geithner will address, including the Fed's plan to buy more securities and economic concerns, such as jobs.

By John W. Schoen, Senior Producer

Amid fresh signs that Europe's financial crisis is spreading, Treasury Secretary Tim Geithner on Wednesday sought to calm fears that political leaders there may not be able to contain the global fallout.

"There is no chance that the major countries of Europe will let their institutions be at risk in the eyes of the market. There is not a chance," Geithner told a CNBC investor conference in New York city.

Geithner's remarks came hours after bond rating agency Moody's cut its ratings on two French banks, Societe Generale and Credit Agricole, because of their exposure to Greek debt. The leaders of Greece, France and Germany were scheduled meet again later Wednesday to head off a Greek bond default.

"They are absolutely committed and they have the financial capacity, the economic capacity, to do what it takes to hold this thing together," said Geithner, who was the head of the New York Federal Reserve at the height of the 2008-09 financial crisis and helped craft a plan to prop up major Wall Street banks and stabilize the financial system.

Geithner is headed to a meeting with EU finance ministers Friday to urge them to speed up changes to their bailout fund.

The Treasury Secretary also defended the Obama administration's proposal to fund a $450 billion economic stimulus package in part by raising taxes on the wealthy.

"Nobody likes to see taxes change — their taxes go up. There are no options on the table that are going to be attractive to everybody," Geithner said. "We have to make judgments about how we live within our means."

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