U.S. Department of the Treasury

In testimony before the U.S. Senate Committee on Banking, Housing and Urban Affairs yesterday, Treasury Secretary John Snow discussed international economic and exchange rate policies. He said that Global imbalances are a key issue on the international economic agenda. They arise because of large growth disparities in major countries, differences in the relative attractiveness of investment in their economies, and divergent patterns of saving and investment. The U.S. current account deficit and corresponding surpluses elsewhere reflect these disparities. Reducing global imbalances, in an orderly manner that sustains and maximizes global growth, is a shared responsibility requiring complementary actions by a large number of countries. In this context, I have repeatedly emphasized that the international economy performs best when large economies embrace free trade, the free flow of capital and flexible currencies.