Paulson Wants Quicker Regulatory Overhaul

Treasury Secretary Henry Paulson on Thursday stressed the need for speed in efforts to overhaul the oversight framework for the financial system.

In March Paulson first unveiled plans that would instill in the Federal Reserve broad new powers to oversee market stability. The "market turmoil" following the near collapse of Bear Stearns and the central bank's role in aiding a sale to JPMorgan Chase(JPM), however, have made it evident the plans must proceed quicker.

"When we published the blueprint in March, I made clear I believed we were laying out a long-term vision that would take time to consider and implement," Paulson said at a meeting of Women in Housing and Finance in Washington, D.C. "Since then, the Bear Stearns episode and market turmoil more generally have placed in stark relief the outdated nature of our financial regulatory system."

Paulson said Treasury is working with the Fed and the Securities and Exchange Commission on issues related to the central bank's decision -- made amid the rocky market at the time of Bear's crisis -- to make credit available to primary dealers such as Goldman Sachs(GS), Lehman Brothers(LEH) and Morgan Stanley(MS).

"[W]e must dramatically expand our attention to the fundamental needs of our system, and move much more quickly to update our regulatory structure -- always keeping in mind that there must be a balance between market discipline and market oversight," Paulson said.