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Obama briefed on Greece and Wall Street turbulence

Administration pledges support for Greece while market regulators launch trading investigation

Thursday May 6, 2010, 8:28 pm EDT
http://finance.yahoo.com/news/Obama-briefed-on-Greece-and-apf-4098393791.html?x=0&sec=topStories&pos=1&asset=&ccode=

WASHINGTON (AP) -- The Obama administration stressed Thursday that it supports efforts to provide emergency loans to Greece, while U.S. market regulators announced an investigation into unusual trading activity during a volatile day on Wall Street.

Treasury Secretary Timothy Geithner and Lawrence Summers, head of the president's National Economic Council, briefed President Barack Obama on the market turbulence and the debt situation in Greece, White House press secretary Robert Gibbs said.

"Greece is enacting major economic reforms with the support of the euro-area and the IMF," Gibbs said in a statement. "We strongly support this effort to help restore stability to Greece and confidence to the global financial system and we will continue to communicate this to European officials."

A Treasury Department official said Geithner would discuss developments in Greece with other finance ministers from the Group of Seven major industrial countries during a conference call Friday morning. The G-7 includes the United States, Japan, Germany, France, Britain, Italy and Canada.

Meanwhile, the Securities and Exchange Commission and the Commodity Futures Trading Commission issued a statement saying they are working with other financial regulators and the stock exchanges to "review the unusual trading activity that took place briefly this afternoon."

The two agencies said they would take appropriate steps along with the stock exchanges to protect investors.

"We will make public the findings of our review along with recommendations for appropriate actions," the SEC and CFTC said in their statement.

Rep. Paul Kanjorski, D-Pa., chairman of the House Financial Services subcommittee that oversees the SEC, sent a letter Thursday to agency Chairman Mary Schapiro asking for a "thorough examination" of the causes of the plunge and what changes may be needed to prevent future episodes.

Kanjorski also announced that his panel will hold a hearing Tuesday to examine the episode.

"Within a matter of minutes today, we faced a market that seemed just as volatile as it did in the fall of 2008," Kanjorski told Schapiro in the letter. "Reports have surfaced that much of this movement was potentially as a result of a computer glitch. We cannot allow a technological error to spook the markets and cause panic."

The Treasury official, who spoke on the condition of anonymity because he was not authorized to speak publicly, said that the Friday call with Geithner and the other G-7 officials is aimed at getting an update on efforts to supply Greece with emergency loans from various European countries and the International Monetary Fund.

The official said Geithner also conferred with financial regulators in two conference calls to assess the sharp swings in stock prices Thursday afternoon.

Those discussions included Federal Reserve Chairman Ben Bernanke, Schapiro, William Dudley, president of the New York Federal Reserve Bank, and Gary Gensler, head of the CFTC.

Geithner also spoke in a separate call with European Central Bank President Jean-Claude Trichet, the official said.