–G7 FinMins, Central Bankers Hold Teleconfence; ECB announces New Moves

WASHINGTON (MNI) – Treasury Secretary Tim Geithner, hours after his
office confirmed he’s not leaving his job, Sunday said S&P showed
“stunning lack of knowledge about basic U.S. fiscal budget math” in
taking away the United States” triple-A rating.

In two brief statements on the NBC Evening News, Geithner said
of the Friday night downgrade, “I think S&P’s shown really terrible
judgment and they’ve handled themselves very poorly and they’ve shown a
stunning lack of knowledge about basic U.S. fiscal budget math and I
think they drew exactly the wrong conclusion.”

Geithner, NBC said, believes Congess owns the national credit
rating since Congress holds the power of the purse.

“Our country is much stronger than Washington,” Geithner said. “We
have a very resilient economy. We’re a very strong country.”

Geithner continued, “I have enormous confidence in the basic
regenerative capacity of the American economy and the American people.”

Geithner participated in a conference call Sunday evening among the
G7 country finance ministers and central bankers. The Treasury
Department had no immediate comment following the call.

It followed another teleconference, among European policymakers,
that led to the European Central Bank Sunday announcing that to “ensure
price stability in the euro area,” it will “actively implement its
Securities Markets Programme, buying bonds issued by Italy and Spain.

The ECB said the buying program is designed to help restore a
better transmission of monetay policy decisions “taking account of
dysfunctional market segments.”

The ECB statement said its Governing Council “welcomes the
announcements made by the governments of Italy and Spain concerning new
measures and reforms in the areas of fiscal and structural policies.”
The ECB called for “decisive and swift implementation” of the reform
measures “in order to substantially enhance the competitiveness and
flexibility of their economies, and to rapidly reduce public deficits.”

Earlier Sunday the U.S. Treasury Department issued a statement
putting an end to speculation Geithner was about to leave the Obama
administration. “Secretary Geithner has let the president know that he
plans to stay on in his position at Treasury. He looks forward to the
important work ahead on the challenges facing our great country,” the
Department statement said.

** Market News International Washington Bureau: 202-371-2121 **

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