WASHINGTON (RPRN) 26 March 2009-The Obama Administration is seeking expanded powers to monitor large financial firms, regulate the amount of risk they can take, and create an orderly way to take over the company if it poses a risk to the financial system.
The changes need congressional approval, and Treasury Secretary Timothy Geithner will offer details of the sweeping proposals at a hearing Thursday.
The government already has the power to seize failing banks, dispose of their bad loans, and install new management.
The new proposals would allow the government to use a similar process with non-bank financial institutions, like the failed insurance giant AIG.
The plans also call for more scrutiny of hedge funds, and other major financial firms that have been lightly regulated in the past.
Avoiding future financial meltdowns is likely to be one of the topics U.S. President Barack Obama takes up when he holds an online town hall meeting Thursday.
The White House is inviting people to ask questions via its Web site: www.whitehouse.gov. Tens of thousands of people have visited the site to pose questions and vote for the ones they most want answered.
Some information for this report was provided by AP and Reuters.