Geithner to Japanese Newspaper: No Second Wave of “Collapse of Banking”

From the Asahi Shimbun:

MR. FUNABASHI: I see. Is there any danger or risk for us to see the second wave of, you know, the collapse of banking, you know, the institutions if we would mishandle this stress test, you know, putting the public money into the companies?

SEC. GEITHNER: No, I don’t think so because we’re being very clear that we want to make sure there is continuity of funding, the banks are able to meet their commitments as we go through this process of adjustment, and that the government is prepared to put capital in where it’s necessary.

So in some ways what we’re saying is we’re going to backstop the amount of capital-raising that’s necessary.

And, again, a lot of that will come from the market, ultimately. But where it doesn’t we’ll make sure we provide it.