March 16, 2009 / 6:50 AM / 11 years ago

Treasury close to bank rules proposal

President Obama is joined by Secretary of Treasury Timothy Geithner while they talk with small business owners, community lenders, and members of Congress in the East Room of the White House, March 16, 2009. REUTERS/Larry Downing

WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner will soon propose an overhaul of the financial regulatory system that is expected to give the Federal Reserve powers to monitor broad economic risks, a Treasury spokesman confirmed on Monday.

As officials grapple with the worst financial meltdown since the Great Depression, government officials plan to outline a revamp of controls over banks and financial institutions aimed at preventing a repeat of the crisis.

Geithner is due to soon outline proposed changes that are also expected to include tougher capital standards for banks, according to a report in the Wall Street Journal that a Treasury spokesman said is accurate.

The administration’s goal is to unveil its proposals before the meeting of the heads of state of the Group of 20 rich and developing economies in early April, the report said.

The rules are further expected to aim to ensure that banks cannot shop among different regulatory agencies to obtain the most lenient supervision and require more transparency and stricter rules for the way money flows between banks.

Consolidated consumer protection enforcement is also among contemplated changes.

(with additional reporting by Ajay Kamalakaran and S. John Tilak in Bangalore)

Reporting by Mark Felsenthal; Editing by Mike Nesbit

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