BERLIN, April 1 (Reuters) - Horst Koehler, the designated managing director of the International Monetary Fund, was quoted on Saturday warning against going too far in liberalising international financial markets.
Koehler told Germany's Der Spiegel weekly in an interview that during his five-year term of office, which begins in May, he would work to give governments the power to slow down the global flow of speculative money.
"We need a better balance between the free flow of capital and the domestic absorption structures," Koehler said. "More market transparency will lead to a reduction in the chances for crises in financial markets."
Koehler said he would not try to recommend regulating the outflow of capital from any country because that would only damage the country in the longer term.
But he said it should be possible to temporarily limit the inflow of speculative capital into any country.
"When one sees that a country cannot come to terms with the flood of capital inflow, it should be possible to slow that down for a short term," he said.
"A government could, for example, in such a case require a cash deposit -- a sort of interest-free security that would thus dampen the return expectations."
He also said he would like to see tighter control of so-called risk funds, which move vast sums of capital between countries in search of higher returns.
In a separate interview to appear in the newspaper Welt am Sonntag on Sunday, Koehler said he wanted to see private capital used more in conjunction with IMF efforts to combat financial crises in the future.
"It cannot be that private investors pocket attractive returns when things are going well but that the IMF is there to bail them out when things don't go well."
Koehler is a former German finance ministry official who is stepping down as head of the European Bank for Reconstruction and Development to take the IMF job.
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