Treasury Secretary Tim Geithner said Thursday that the Obama administration is about to outline a set of “relatively concrete” proposals on financial regulatory reform.
The proposals should be out before Geithner testifies on the issue before the House Financial Services Committee March 26, Geithner said.
Geithner made his comments in an appearance before the Senate Budget Committee.
Going forward, a revised regulatory scheme must protect against the threat that weakness in one financial institution may cause damage to the entire financial system, Geithner said.
Geithner said one of the problems with the current financial regulatory system is that financial institutions were allowed to choose their regulators and design products in a way that permitted the products to avoid regulation.
It is important to create a new regulatory structure that prevents “this kind of regulatory arbitrage,” Geithner said.