WASHINGTON — Treasury Secretary Timothy Geithner continued to push for his regulatory restructuring plan in a briefing with reporters on Tuesday, arguing that the administration is making progress and signaling a willingness to compromise.
"Obviously we want to get this done as quickly as we can," Geithner said. "As we've seen before, as you let the memory of the crisis fade it's easier for people to fight reform. The best strategy our opponents can adopt is to slow things down."
But he said he was optimistic about getting a consensus.
"My own sense is that the reform package is actually making a lot of progress," he said. "There is quite a lot of consensus on the core elements."
The secretary declined to discuss on the record the first part of his proposal being taken up by the Hill — a Consumer Financial Protection Agency. House Financial Services Committee Chairman Barney Frank is expected to bring his bill to create such an agency to a vote next month.
Instead, Geithner focused on a part of the plan to let the government resolve systemically important institutions. The Treasury secretary said resolution powers are crucial to ending the "too big to fail" mentality. He rejected arguments by Republicans that resolution powers amounted to more government bailouts.
"Resolution authority is not for savings banks; it's used to dismember, unwind, restructure, close institutions with less collateral damage and less risk to the taxpayer," Geithner said.
The administration initially pushed for resolution authority early this year, but it has since taken a back seat to other reform issues.
During the briefing, Geithner also continued to argue that systemically important institutions should be identified as such.
Frank has said it would be a mistake to create a list of Tier 1 financial holding companies — the administration's proposed name for systemically important institutions.
"While those who proposed [the list] in good faith thought it would be a kind of scarlet letter on them, in fact, others have seen it as a badge of honor," Frank said last week.
But Geithner argued that the institutions the Fed considered systemically important would be subject to higher capital standards, and he played down any benefit from such a designation.
"This so-called designation is a burden, not a privilege," Geithner said.
Still, he said he recognized that the administration must convince investors that these institutions can fail.
"The most important thing to do is make sure banks and investors don't live with the expectation the government is going to bail them out," Geithner said. "We have to make sure we build into our system the capacity to let institutions fail without igniting an inferno."