Treasury Secretary Henry Paulson says the government must move quickly to give the Federal Reserve more powers to regulate the financial system. Paulson said Thursday that the central bank's powers need to be expanded in the wake of the near collapse earlier this year of Bear Stearns, the giant Wall Street investment firm. He said there was a need to consider quickly how to give the Fed the power it needs to obtain information from investment banks and the responsibility to intervene to protect the overall financial system. His comments were provided by the Treasury Department as excerpts from a speech Paulson was to give later in the day. In late March, Paulson unveiled a blueprint that proposed the most sweeping overhaul of the nation's financial regulatory system since the stock market crash of 1929 and the ensuing Great Depression. At the time, he said Congress should consider ways to expand the Fed's powers to oversee investment banks but he set no timeframe for when this should occur. However, in his speech Thursday he stressed the urgency of acting soon. "We should quickly consider how to most appropriately give the Fed the authority to access necessary information from highly complex financial institutions and the responsibility to intervene to protect the system so that they can carry out the role our nation has come to expect – stabilizing the overall system when it is threatened," he said.
