Obama Nudges Congress to Empower Regulatory Units

President Barack Obama said Tuesday he hopes "it doesn't take too long to convince Congress" to approve new authority to oversee big, tottering financial firms.

The administration is pushing the idea of an overarching regulator, such as the Federal Reserve, to have the ability to take over nonbank financial entities whose failure could topple the entire banking system.

Treasury Secretary Timothy Geithner is expected to detail the administration's proposal for a broad overhaul of financial sector regulations during testimony Thursday before the House Financial Services Committee. Along with the new regulating authority, the administration wants increased oversight and controls of previously unregulated markets such as hedge and private equity funds.

Barack Obama
Barack Obama

Those funds also are expected to be a chief target of discussions between Obama and fellow leaders of the Group of 20 major world economies next week in London, at a summit on the global financial crisis.

Obama told reporters, after an Oval Office meeting with Australian Prime Minister Kevin Rudd, that his administration is "very confident" that the U.S. will work in concert with those other nations to stabilize global financial system. French Prime Minister Francois Fillon said earlier Tuesday that the U.S. and Europe agree on the need for new international regulation of hedge funds and also for rating agencies and reforms in international accounting standards.

There have been indications the United States is at odds with some countries that want to focus more on financial regulation than on government spending to stimulate their economies.

Obama said he expects the G-20 meeting will produce a framework for broad financial regulation, but that specific issues won't be settled right away.