FACTBOX: Major U.S. financial regulation initiatives

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\viewkind4\uc1\pard\highlight1\f0\fs24 (Reuters) - The Obama administration and congressional Democrats are moving to tighten U.S. financial regulation to prevent another banking and market crisis.\par

Changes will affect banks, hedge funds, exchanges and other segments of the financial services industry. The administration is expected to unveil a comprehensive reforms package on June 17, covering some of the major issues listed below. Firms whose business models could be at risk under various proposed changes are listed in each section under "political risk exposure":\par

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SYSTEMIC RISK REGULATOR\par

The Obama administration wants the Federal Reserve to monitor systemic risk in the economy, with the idea that it could head off future crises. No single agency is now designated to do this. The administration also wants to establish an inter-agency council of regulators that would cover broad policy coordination in the same area.\par

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CAPITAL AND LIQUIDITY STANDARDS\par

The administration wants financial institutions to thicken their capital cushions to absorb losses when times are tough, and make themselves more liquid, or able to move quickly in and out of various holdings, "with more stringent requirements for the largest and most interconnected firms."\par

The proposal has broad international implications, with the European Union eyeing similar changes.\par

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SECURITIZATION\par

The administration is proposing that asset-backed securities issuers face new reporting requirements, as well as a rule requiring originators, sponsors or brokers of securitized instruments to retain at least 5 percent of the performance risk in them.\par

Political risk exposure: Citigroup, Wells Fargo, Bank of America, JPMorgan Chase.\par

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CREDIT RATING AGENCIES\par

Reliance by investors and regulators on credit-rating agencies would be reduced, under administration plans.\par

The SEC is already considering reforms on potential conflicts of interest at credit rating agencies. Final action is likely months away.\par

Political risk exposure: Moody's Corp <MCO.N