February 5, 2009 / 3:35 PM / 12 years ago

UPDATE 1-US Treasury's Geithner to meet with top regulators

(Adds details on working group, background, Egypt call)

WASHINGTON, Feb 5 (Reuters) - U.S. Treasury Secretary Timothy Geithner will convene his first meeting as Chairman of the President’s Working Group on Financial Markets on Thursday, but the expanded gathering also will include top banking regulators and White House economic adviser Larry Summers.

The group, created in the aftermath of the 1987 stock market crash to ensure orderly and efficient markets, is led by the Treasury and normally includes the heads of the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission.

When Summers held senior positions at the Treasury Department in the 1990s, the secretive group became colloquially known as the “Plunge Protection Team.”

The Treasury said in a statement that the 3:30 p.m. (2030 GMT) meeting will include Fed Chairman Ben Bernanke, new SEC Chairman Mary Schapiro and acting CFTC Chairman Michael Dunn as well as Federal Deposit Insurance Corp Chairman Sheila Bair, Comptroller of the Currency John Dugan and Federal Housing Finance Agency Director James Lockhart.

In addition to Summers, the meeting also will include White House Council of Economic Advisors Chairman Christina Romer.

The meeting comes as the Obama administration is working on a comprehensive plan to stabilize the U.S. financial system and restore the flow of credit to the economy.

Geithner next week intends to lay out a framework for how the administration plans to handle the second $350 billion in financial rescue funds and is expected to outline how the government plans to deal with toxic assets on bank books.

Among ideas the officials have explored are setting up a “bad bank” entity to hold troubled assets, providing government insurance against losses on assets still held by banks and more direct capital injections into financial institutions.

The Treasury also said Geithner spoke on Wednesday with Egyptian Finance Minister Youssef Boutros-Ghali and discussed the upcoming G-20 ministers and leaders meetings, which “will focus on the challenges facing the global economy.”

Boutros-Ghali is also chairman of the International Monetary Fund’s policy steering committee. (Reporting by David Lawder; Editing by James Dalgleish)

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