Geithner says U.S. banks are changing

"The big banks are running with much less leverage now, much more conservative liquidity cushions," Geithner told The Wall Street Journal Thursday.

"There's been a significant shrinking of their balance sheets, getting rid of bad assets and cleaning up," he said. "And the weakest parts of the system don't exist anymore."

Referring to regulatory reform, Geithner said there was "a high probability we'll get stronger protection for consumers and authority to constrain excess risk-taking and create a more stable system."

Among the reforms he expects to make through legislative hurdles was the authority for regulators to take over failing non-bank firms that were so large they threatened the financial system as a whole.

"We will get resolution authority and help reduce moral hazard and contain damage of future financial crises," he said. "We'll get a council overseeing the whole system and making sure we have strong standards and are looking ahead for gaps."

Copyright 2009 by United Press International.