UPDATE 1-Geithner: U.S., Europe broadly agree on restraints

* U.S., Europe broadly agree in regulation

* Geithner upbeat on prospects for global framework

* German minister says two positions quite close

By Glenn Somerville and Gernot Heller

BERLIN, May 27 (BestGrowthStock) – U.S. Treasury Secretary Timothy
Geithner said the United States and Europe broadly agreed on the
need for controls on risk taking but should ensure they do not
impede recovery.

“I think we all agree we want more conservative restraints
on capital and leverage,” Geithner told a joint news conference
with German Finance Minister Wolfgang Schaeuble in Berlin.

There was broad agreement on the need for controls “on risk
taking, more conservative capital requirements, bringing
transparency and disclosure to derivatives markets, making sure
that regulators and supervisors can do their jobs in protecting
the economy from risk and these things”, Geithner said.

But this must be designed carefully so that it “makes the
system more stable in the future but doesn’t create a risk of
financial headwinds to the recovery we are seeing happening”.

The U.S. Treasury Secretary did not refer to his earlier
criticism of his German hosts over their unilateral move last
week to ban naked short-selling of certain assets, which spooked
financial markets and angered Germany’s European Union partners.

Schaeuble said the United States and Germany were more in
agreement on the approach to regulation than it might seem.

“As far as what could be done or what needs to be done with
financial market regulations, we’re actually a lot closer with
our assessments than it might appear at times,” Schaeuble said.

“But it’s clear one also has to keep in mind that the
traditions and structures of the financial sectors in the United
States are naturally quite different than in continental
Europe,” he said. “And that’s why not everything that goes in
the same direction can be translated one-to-one for both areas.”

Geither said that ahead of next month’s Toronto G20 summit
there had been progress on a framework for the global financial
system, meaning leaders were “in a very good position to put in
place a much better system than we had coming into this crisis”.

Geithner said the United States was committed “to cover the
cost of this crisis and the cost of future crises by imposing a
fee on the largest financial institutions” and welcomed backing
for this approach in Europe, including from Germany.

The Treasury Secretary said global recovery and a return to
growth required “clear commitments to restore gravity to our
fiscal positions over time”, while recognising that different
countries had “different room for manoeuvre”.

Geithner gave few details of his talks earlier on Thursday
and late on Wednesday with European Central Bank chief
Jean-Claude Trichet and its governing council member Axel Weber.

Investment Advice
(Writing by Stephen Brown and Erik Kirschbaum; Editing by
Matthew Jones)

UPDATE 1-Geithner: U.S., Europe broadly agree on restraints