WASHINGTON — Declaring that the financial system was “starting to heal,” Treasury Secretary Timothy Geithner said Wednesday that major banks had raised $56 billion since stress tests showed several in need of more capital — a sign of emerging investor confidence.
Geithner also said a public-private program announced in March to rid institutions of their worst assets would be in place by July.
The hopeful assessment was laden with caution, however. Geithner pointedly warned the committee that he would not discuss an “exit strategy” for the government’s $700 billion intervention in major private-sector institutions.
“It’s not quite time yet,” he told Sen. Richard Shelby of Alabama, the top Republican on the committee.
Confronting anxiety among Democrats and Republicans, Geithner said resolving the business entanglements of insurance conglomerate American International Group would take significantly longer than initially envisioned.
He disputed Republican assertions that bank repayments of government infusions can’t be used for further assistance to the financial system.
All in all, senators from both parties voiced skepticism about the degree to which the Treasury has intervened in companies and about what it has done or failed to do with the leverage it has gained over those firms.
