US Treasury Secretary Timothy Geithner has warned the European Commission that its plans to regulate hedge funds and private equity groups could spark a transatlantic row, according to a report.

Proposed new rules might damage US hedge funds, private equity groups and banks by curbing their ability to do business with Europe, Geithner argued in the one-page letter sent on March 1 to the EU's internal market commissioner, Michel Barnier.

European diplomats were to meet Thursday to try to reach agreement on the new proposals before presenting them to EU finance ministers next week.