Earlier today,Treasury Secretary Timothy Geithner spoke before the Council on Foreign Relations, further promoting Treasury's initiative to develop "a more modern framework of regulation" to handle systemic risks to the national and global economy, so that the country is never again "confronted with the "untenable choice between catastrophic financial risk and massive taxpayer bailouts." Touching on issues raised during yesterday's House Financial Services Committee hearing dealing with the government's inability to seize control of systemically-significant "non-bank" entities, Secretary Geithner promised to begin laying out over the coming weeks the Administration's broad framework for dealing with the kind of systemic risk that AIG and other non-bank entities pose, including giving the government the tools to "limit the risk-taking at firms that could set off cascading damage." He also touched on the recent launch of the Public Private Investment Program (see our Advisory), stating that the effects of the program will not be measured "solely on the basis of how much activity you get through these funds." They expect to see a "gradual" change in market behavior, including positive effects on liquidity and pricing of assets in the marketplace.

As next week's Group of 20 summit in London approaches, Secretary Geithner took issue with the idea that the U.S. and the European Union (EU) were divided on the level of stimulus necessary, saying the EU is "fundamentally with us" in its approach to the crisis, despite European Union president, Mirek Topolanek's (who has recently been required to submit his resignation) of the Czech Republic, who has rejected calls for Europe to mimic U.S. stimulus spending at recent EU meetings, echoing the position of several member states.