UPDATE 1-US's Geithner says confident can deal with CIT

(Adds more quotes)

LONDON, July 13 (Reuters) - U.S. Treasury Secretary Timothy Geithner said on Monday he was confident the government would be able to deal with ailing financial company CIT Group Inc. CIT.N. "I am actually pretty confident in that context that we have the authority and the ability to make sensible choices," Geithner said in response to a question about how the U.S. government might deal with the company, which provides financing to many small and medium-sized businesses.

CIT has encountered a severe credit crunch because of losses and is in talks with regulators on ways to boost liquidity.

Geithner gave no hint what he expected will happen with CIT but expressed concern about its current condition.

"Obviously in that case, as always, we're watching closely developments in those markets," he said.

"We have a significant interest generally in trying to make sure the financial sector gets through this, adjusts where it needs to adjust and emerges stronger."