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Geithner set to scale back bank support

US TREASURY secretary Timothy Geithner said yesterday that Obama&rsquo;s administration could end some of the extraordinary support it has put in place for the markets, and start to prepare for a slow recovery as the economy begins to strengthen.<br /><br />Speaking to the Congressional Oversight Panel for the $700bn (&pound;420bn) Troubled Asset Relief Programme (Tarp), Geithner said the economy was now in far better shape than a year ago, when it was &ldquo;on the verge of collapse&rdquo;, though it still had problems.<br /><br />&ldquo;As we enter this new phase, we must begin winding down some of the extraordinary support we put in place for the financial system,&rdquo; he said. &ldquo;We are now in a position to evolve our strategy as we move from crisis response to recovery.&rdquo;<br /><br />Geithner also said he supported a review from the Federal Deposit Insurance Corporation&rsquo;s (FDIC), which will make it much harder for banks to get funding guarantees.<br /><br />Geithner faced a grilling from the Tarp panel members, who wanted to know why taxpayer-provided aid was readily available for financial firms but not for other types of businesses. He said the decision to aid banks was helping the wider economy.<br /><br />Geithner said banks that received capital injections have repaid more than $70bn, reducing the government&rsquo;s total investment to $180bn. He estimated another $50bn will be repaid over the next 12 to 18 months.<br /><br />He added that it would be necessary to keep applying stimulus measures as required to get growth firmly back on track.<br /><br /><strong>FAST FACTS </strong> US STIMULUS<br />Treasury secretary says the US is ready to prepare for a slow recovery.<br /><br />The economy was &ldquo;on the verge of collapse&rdquo;, last year, but is now ready for the government to end some of its stimulus measures.