The ripple effect

NEW YORK, March 16 (UPI) -- U.S. Treasury Secretary Tim Geithner said he was ready to take the bull by the horns and press for regulatory changes after a weekend meeting in London.

Finance ministers from Group of 20 nations meet to firm up initiatives that will serve as talking points for the April 2 summit -- in other words, for when finance ministers' bosses arrive.

After the meeting, Geithner said the goal was to "accelerate the pace of change on the reform agenda," The Wall Street Journal reported.

The strength of that change or whether reform, as it often is, becomes just a puff in the wind, has yet to be seen. U.S. banks are waiting for details on the Obama administration's plan for removing toxic assets from their ledgers. Automakers General Motors Corp. and Chrysler LLC are waiting for word on whether outlined strategies they gave the Treasury will meet with approval, which would allow them to borrow another $22 billion.

Meanwhile, some news items, such as American International Group, strike a "business-as-usual" chord. Like the furor over $3.6 billion in bonuses pay given to Merrill Lynch executives in spite of huge losses, AIG was lambasted over the weekend by outraged politicians when it was found the insurer that lost $40.5 billion last year was handing $170 million in bonus pay.

U.S. Rep. Elijah Cummings,. D-Md., termed AIG "reckless" and called on Treasury-appointed Chief Executive Officer Edward Liddy to resign.

The bonus controversy is the type of news likely to keep bank reform high on the administration's agenda. In addition, Europe leaders have been pressing for reform on an international scale. The G-20 meeting will press that point, offering credence on an global scale to regulatory change.

The headline changes under consideration, the Journal reported, include increased capital requirements for banks to provide a larger in-house cushion against losses, greater transparency for bank-to-bank transactions and tighter guidelines to prevent financial firms from dodging regulations by shopping around for the more lenient oversight body to monitor their behavior.

In the short term, markets are coming off a rebound week that saw the Dow Jones industrial average rise 10 percent from 6,547.05 to 7,223.98, climbing four consecutive days Tuesday through Friday.

Asian markets were poised to continue the climb Monday, the Hang Seng index up 3.6 percent in Hong Kong, the Nikkei index up 1.78 percent in Tokyo.

European markets were also up across the board with the Dax 30 in Frankfurt up 2.34 percent, the CAC 40 in Paris up 2.56 percent. The broader DJStoxx 600 was up 2.49 percent, while the FTSE 100 index rose 2.01 percent in London.

Investors will be looking at the National Association of Homebuilders/Wells Fargo report Monday, which last month lifted slightly off January's record low and a leading macroeconomic indicator. When the housing market improves, accordingly, rugs, couches, lamps, tables and dish washers will move out of warehouses.

It is the reverse ripple effect that regulators want to avoid: Putting restrictions in place that quell credit instead of gently guiding it along.