Fed Reserve and Exec Branch Take On New Powers, Powers that may Strain the Muscle of Capitalism, Risk Taking. Summers Next to Head Fed?

=DJ AT A GLANCE: Obama To Offer Financial Regulatory Reform Plan THE EVENT: President Barack Obama Wednesday will propose the most sweeping overhaul of the way the U.S. government oversees financial markets since the 1930s. He will push Congress to grant the Federal Reserve and the executive branch of government vast new powers to supervise previously unregulated aspects of the economy, while reorganizing other aspects of oversight. THE DETAILS: The Obama proposal - according to a near-final draft of the plan viewed by The Wall Street Journal - would: - Give the federal government power to take over and wind down a large financial company. -Mandate that large financial institutions raise more capital and meet higher liquidity standards. - Give the Federal Reserve more power over payments and settlement systems. - Give the Fed power to oversee almost any financial institution in the U.S., including firms' foreign affiliates. - Allow the Fed to oversee any commercial company that owns a banking charter. - Set up a new consumer protection agency with the ability to write rules related to mortgages, credit cards and other consumer products. - Abolish the Office of Thrift Supervision and create a new national regulator for financial institutions. - Require advisers to hedge funds and other private pools of capital to register with the Securities and Exchange Commission. - Suggest there be some sort of federal coordination of insurance regulation. - Give the SEC and the Commodity Futures Trading Commission more authority to police and prevent fraud in the derivatives market. - Require more scrutiny of credit-ratings agencies. REACTION: The proposed regulatory changes received some support from the Securities Industry and Financial Markets Association, the American Securitization Forum, the Managed Funds Association and the Investment Company Institute. MARKET REACTION: Reaction to the plan has been muted, given the current embryotic state of the plan - and the fact most of the news already was out. WHAT'S NEXT: After Obama formally unveils the plan, the White House will send it to Congress. Most of the details will be crafted in both chambers. "We expect that Congress will move swiftly to get these laws in place. I want to sign them and get them up and running," Obama said Tuesday. (END) Dow Jones Newswires June 17, 2009 12:25 ET (16:25 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 12 25 PM EDT 06-17-09