Geithner: Government Can Handle CIT

Treasury Secretary Timothy Geithner said the U.S. government has the authority and the ability to address the crisis at CIT Group Inc.

"I'm actually pretty confident in that context we have the authority and the ability to make sensible choices," he said at a news conference in London. "We have a significant interest generally in trying to make sure the financial system gets through this, adjusts where it needs to adjust and emerges stronger."

CIT, a New York lender, hasn't been able to persuade the government to back its debt sales and says its failure risks the demise of its customers. Geithner declined to comment on measures the government might take, such as providing a debt backstop or additional capital from the $700 billion Troubled Asset Relief Program.

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

CIT's bonds and shares have tumbled on concern that it won't have access to the Federal Deposit Insurance Corp.'s bond guarantee program, created last year to help unfreeze debt markets. The company's failure would be the biggest collapse of a financial institution since September.