Plan would expand Fed's power to intervene in financial crisis

The Federal Reserve would have the power to regulate virtually the entire financial industry under a Treasury Department proposal to be announced Monday.

The proposal is part of a sweeping overhaul of the government's regulatory structure that Treasury Secretary Henry Paulson will propose in a speech Monday, said Treasury Department spokeswoman Michele Davis.

"I am not suggesting that more regulation is the answer, or even that more effective regulation can prevent the periods of financial market stress that seem to occur every five to 10 years," Paulson will say, according to a text of the speech obtained by The Associated Press.

According to Brookly McLaughlin, another department spokeswoman, Paulson will propose these changes:

• Give the Federal Reserve authority to look at the financial status of any institution that could affect market stability; →