Treasury Secretary Henry Paulson called on Wednesday for an overhaul of US capital markets regulation, saying reforms are needed to maintain American leadership.
Paulson said the US administration is in the midst of a review of market regulation, having announced in May a proposal to strengthen financial reporting and seek more transparency in auditing.
The second stage of the plan seeks a "rationalised regulatory structure" that would help reduce overlap, details of which will be announced next year, the Treasury said in a statement.
Paulson noted that the plan stops short of regulation of hedge funds and other asset managers but would define "best practices" to address investor protection and mitigate risk. "To maintain our capital markets leadership, we need a modern regulatory structure complemented by market leaders embracing best practices," Paulson said.
"The steps we are announcing today will help to strengthen our global competitiveness." Paulson said Treasury is examining the structure of the regulatory system for all financial services providers and will release its blueprint for reforms by early next year.
He added that the plan would allow mutual recognition between countries with similar regulatory schemes. The Wall Street Journal said some moves under consideration include consolidation of some regulators with overlapping responsibilities, such as the Office of Comptroller of the Currency and the Office of Thrift Supervision, which regulate banks and thrifts. Paulson, a former chief at investment firm Goldman Sachs, has frequently said US markets may be overregulated, leading to a loss of competitivity.