Treasury may unveil tighter financial rules soon

By John Poirier

WASHINGTON (Reuters) - The Treasury Department may unveil on Monday fresh plans to tighten rules on financial market players to ward off a future credit market crisis like the one currently threatening to drag the economy into a deep recession.

The department announced on Friday afternoon that Treasury Secretary Henry Paulson will deliver a speech in the ornate Cash Room to "discuss issues relating to financial institutions and financial markets but refused any further details

Industry sources said Paulson may offer a set of recommendations for overhauling the regulation of banks, securities, commodities and insurance.

Several trade groups representing a cross-section of the financial services sector as well as state officials have been invited to attend the Monday speech.

After speaking at 10 a.m. EDT, Paulson is scheduled to fly to Beijing and will remain in China until Thursday night.

Treasury has been working for months on what it calls a "regulatory blueprint," even before calls for an overhaul began to intensify in the wake of the subprime mortgage crisis that began to wreak havoc last summer on financial markets.

Some industry sources think Paulson might go as far as advocating merging some of the federal agencies that have sometimes overlapping jurisdiction over portions of financial services industry.

In theory, that could mean merging the Securities and Exchange Commission, the U.S. markets watchdog, with the Commodity Futures Trading Commission, which oversees the activities of futures and options contracts.