In remarks made yesterday afternoon, Treasury Secretary Tim Geithner said the U.S. financial system is getting stronger, and is now significantly stronger than it was before the crisis.
This is consistent with a report that the Roundtable released earlier this week.
Monumental changes have occurred since the financial crisis. Some of these changes have been government imposed, through the Dodd-Frank Act. But, a host of changes have happened on behalf of the companies themselves. And with 70% of the rules from Dodd-Frank having not yet gone into effect, as well as the Basel III capital standards, this is indeed progress.
Executive compensation has been reformed significantly to align with long-term performance. Banks are at the highest capital levels in the history of American banking. TARP will be repaid with $21 billion in profit to taxpayers.
Geithner said, “The stronger position of banks is helping to support broader economic growth, including the more than 3 million private sector jobs created over 22 straight months, and the 30 percent increase in private investment in equipment and software. Broadly, the cost of credit has fallen significantly since late 2008 and early 2009. Banks are lending more, with commercial and industrial loans to businesses up by an annual rate of more than 10 percent over the past six months.”
As the Secretary remarked, there is hard work ahead. We are not out of the woods yet. But, consumers and small business owners should be confident as we move forward that we are well on our way.