POLITICS
09/02/2009 05:12 am ET Updated May 25, 2011

Geithner: No Chance "At All" Of Financial System Collapse

The Obama White House set a cautiously optimistic tone during a series of Sunday morning show interviews with administration officials.

But some of the sunniest comments came from Treasury Secretary Timothy Geithner, who declared that there was now no chance "at all" for a collapse in the financial system, touted the money being paid back from the Troubled Asset Relief Program, and stated that the White House had no plans to ask Congress for more funds to bolster banks.

Appearing on ABC's This Week, Geithner acknowledged that problems in the economy remain. The White House, he said, would work with Congress to address the possible extension of unemployment benefits, which stand to run out for as many as 1.5 million Americans. He also left open the possibility that the administration would close the deficit by hiking taxes, likely on the wealthy.

"We're going to have to do what's necessary," he said.

On the topic of the banks, however, Geithner was far more sanguine. "The financial system today is more stable, the cost of credit is more available, the cost of credit is down significantly," he said. "Broad concern about collapse of the financial system has receded dramatically. And that is very, very important to the prospects of recovery."

Asked if the country was going to see a collapse of the financial system, Geithner responded: "No, not at all. That's not going to happen. It's absolutely preventable and again there is much more confidence today than we've seen in the last, I think, even in a year, in the basic stability of the U.S. financial system and that is a very, very important accomplishment."

As evidence, the Treasury Secretary disclosed that the TARP had roughly $130 billion left in funds, up from the $40 billion that was there three months ago. To date, he added, $70 billion had been paid back from banks that had received government assistance. Geithner said that money was going "directly to reduce our debt," though, as the Huffington Post has reported, some of the funds have been siphoned off for other troubled financial institutions.

Asked if the administration was certain that it would not have to go back to Congress to get more money for the banking system, Geithner replied: "We do not plan to ask for more money and I think it's quite unlikely that we do."

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