Geithner, Weber discuss euro crisis, banks

(FRANKFURT) - US Treasury Secretary Timothy Geithner held talks Tuesday about Europe's bailout fund and the stability of EU banks with the head of head of Germany's central bank.

"What interests the Americans is the stability of the financial markets, the future of the European stability fund and the reforms under discussion on the Stability and Growth Pact," Axel Weber told reporters after the meeting.

"The other subject that interests them is banks, their recapitalisation needs and resistance tests," he added.

Geithner stopped briefly in Frankfurt on his way to talks with German Finance Minister Wolfgang Schaeuble in Berlin, where he will also meet Economy Minister Rainer Bruederle.

He also met European Central Bank President Jean-Claude Trichet for breakfast in Frankfurt, a spokesman said.

According to a Treasury statement, Geithner's Berlin talks will focus on "global efforts to impose sanctions applying maximum pressure on the (Moamer) Kadhafi regime" in Libya.

"Sanctions against Iran for its failure to meet its international obligations" is another item on the agenda, the statement said.

Weber declined to give further detail about his talks with Geithner, saying that both had agreed not to discuss the substance publicly.

Geithner and Schaeuble, however, were set to hold a joint news conference at around 1400 GMT.

The talks come as European countries grapple with the best way to arm themselves against future debt crises.

Eurozone leaders are expected to formally approve this month a near-doubling of the effective lending capacity of a fund designed for potential future bailouts to around 500 billion euros ($700 billion).