* Geithner cites "encouraging signs" on US economy
* He says confident financial reform legislation will pass
(Adds comments on legislation, context)
By David Lawder
WASHINGTON, April 22 U.S. Treasury Secretary
Timothy Geithner says some parts of the U.S. economy are "very
strong" and that the United States was rebounding from
recession more quickly than most other major economies.
Geithner, in an interview airing on Thursday on ABC's "Good
Morning America," described the U.S. economy as "stronger" and
showing normal signs of recovery.
"Absolutely stronger. Again, encouraging signs of, really,
across the economy, of things in the better," Geithner said.
"Parts of the economy are really very strong -- technology.
Manufacturing is getting better."
He cited General Motors Co.'s payback of a $6.7 billion
government loan and the fastest pace of auto industry job
creation in a decade as encouraging signs, along with
strengthening private investment and consumer spending.
But he described the United States as "still a very tough
economy out there" and said more work was needed to boost
credit for small businesses.
In a round of interviews on U.S. morning television,
Geithner expressed confidence that financial reform legislation
will pass in the U.S. Congress now that Republican opposition
to regulatory overhaul appears to have softened.
"If you just listen to the tone of the last couple of days,
it's changed. I spent a huge amount of time with Republicans
over the last few weeks ... and I think they really want to be
for this," he said in an interview on CBS's "The Early Show."
President Barack Obama is due to argue the case for
financial reform in a speech in New York later in the day, as
Democrats rally support for regulatory reform measures headed
for a possible Senate vote next week.
Financial reform is a popular issue with voters and
Democrats believe it could help them in the November
congressional elections. The legislation appears to have gotten
a boost from fraud charges brought against Wall Street
powerhouse Goldman Sachs (GS.N) last week.
Geithner said reforms should put the government in a
position to act more pre-emptively ahead of any future crisis.
Among these are reforms to bring more transparency to the
Asked if he thought a proposal before the Commodity Futures
Trading Commission to allow trading of futures based on film
industry box-office receipts, was a good idea, Geithner said:
"No, I don't."
He added, however, that he was not inclined to ban specific
products because Wall Street would always "innovate" with new
products aimed at meeting real economic needs to or allow
speculative bets on specific outcomes.
"You can't run a system where you have a bunch of
bureaucrats in Washington trying to figure out what's risky and
what's not, because the risk is they'll miss it, they'll be too
late, or they'll overdo it," he said. "So the best thing we can
do for the country is to make sure the system just has better
protections in place when innovations go a little too far."
He said neither the Treasury nor the White House received
any advance notification or warning from the Securities and
Exchange Commission ahead of the regulator's filing of fraud
charges against Goldman Sachs Group (GS.N) last week over the
way the bank sold credit derivatives products.
"That could never happen, it should never happen," he said.
"The SEC is a fully independent agency and they give no
warnings, no notice, no heads up. And there should be no
involvement by any person in the executive branch ever in those
kind of investigations."
Geithner declined to comment on the specifics of the
Goldman case, but added that he believed more transparency was
needed for derivatives markets, which legislation under
consideration by the U.S. Senate would achieve.
(With additional reporting by Mark Felsenthal; Editing by