Geithner Pushes for Increased Regulation

Washington The Treasury Secretary is spreading the word on Capitol Hill. He's telling lawmakers they need to make Uncle Sam's grip on the industry tighter and wider.

For the second time this week, Treasury Secretary Timothy Geithner is on Capitol Hill. The theme today: Regulation, and lots of it.

Geithner is outlining for congress plans to expand regulation of the troubled financial system. Plans the Obama Administration hopes will help restore confidence and prevent future failures such as the collapse of insurance giant AIG. "To address this will require comprehensive reform. Not modest repairs at the margin, but new rules of the game," said Geithner.

The new rules must be simpler and more effectively enforced and produce a more stable system that protects consumers and investors, that rewards innovation and that is able to adapt and evolve with changes in the financial market.

The plan has four major components: a new federal agency to monitor the level of financial risk being taken by hedge funds, private equity firms, and large insurance companies.

Consumers and investors will get new protections, flaws in current regulations will be eliminated and the U.S. will coordinate regulations with international markets.

On Wall Street reaction to the plan is mixed. "Too much regulation is totally no good...too little regulation... Well, we saw what happened," said Alan Valdes with Hilliard Lyons.

The president's plan comes as a record number of people, nearly 5.6 million, are receiving state unemployment benefits. "What's going on is not a game. What matters to you is how you're going to find a new job, when nobody seems to be hiring, or how to pay medical bills after you get out of the hospital, or how to put your children through college when the money you'd put away for tuition is no longer there," said Obama.

The government released the latest numbers on the overall health of the economy on Thursday. And while the numbers show the economy continuing to shrink, the numbers were slightly better than analysts expected.

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