Obama Floats Financial Services Reform Plan

Under the second key area of reform, in which the Administration proposes to establish comprehensive supervision and regulation of financial markets, there would be enhanced regulation of securitization markets, as well as stronger regulation of credit ratings agencies.

Protection for Consumers

The third key reform area would focus on protecting consumers and investors from financial abuse. The Administration proposes to create a new Consumer Financial Protection Agency designed to protect consumers from fraud and abusive practices–which will focus on credit, savings, and payments markets. Stronger regulation of consumer and investor products and services would also be sought. The Administration also seeks a "level playing field and higher standards" for providers of consumer financial products and services, whether or not they are part of a bank.

The Administration's plan also seeks, under its fourth reform area, to improve the tools available to the government for managing financial crises. This would involve creating what the Administration calls "a new regime" modeled on the FDIC, that would allow the government to address the potential failure of even nonbank financial institutions whose failures could pose a systemic risk. The Federal Reserve's emergency lending authority would also be revised to improve accountability.

The fifth area would raise international regulatory standards and improve international cooperation. "As we work to set high regulatory standards in the United States, we must ask the world to do the same," the Administration states in its white paper, which can be downloaded here.