US plans sweeping financial regulatory reforms

US Treasury Secretary Timothy Geithner on Thursday proposed to Congress a set of sweeping financial regulatory reforms, including a "single entity" to oversee all key financial institutions and payment systems.

"We need to strengthen our system of prudential supervision across the financial sector," he told lawmakers as he unveiled the broad reforms covering banks and other financial firms as well as hedge funds, money market funds and the more complex derivative market.

Geithner called for a single regulatory body "with responsibility for systemic stability over the major institutions and critical payment and settlement systems and activities."

The government also wanted to establish "substantially more conservative capital requirements for institutions that pose potential risk to the stability of the financial system."

The tighter capital requirements would be designed "to dampen rather than amplify" financial cycles, he told the House financial services panel in his second briefing to lawmakers in three days aimed at devising stiffer rules to prevent another financial turmoil.

A home mortgage meltdown stemming from securities tied to high-risk home loans triggered a financial crisis across the globe and plunged the world's largest economy into recession in 2007.

Geithner said there a need for "leveraged" private investment funds with assets under management over a certain threshold to register with the Securities and Exchange Commission "to provide greater capacity for protecting investors and market integrity."

He also called for a comprehensive framework of oversight, protections and disclosure for the over the counter derivatives market.

It was aimed at "moving the standardized parts of those markets to central clearing house, and encouraging further use of exchange-traded instruments."