U.S. President Barack Obama on Tuesday sent Congress a 152-page bill to create a new Consumer Financial Protection Agency which will lay the "cornerstone" for efforts to fundamentally reform the U.S. financial regulation system.

"This agency will have the power to set standards so that companies compete by offering innovative products that consumers actually want and actually understand," Obama said in a statement.

"Consumers will be provided information that is simple, transparent, and accurate," the president said. "You'll be able to compare products and see what's best for you. The most unfair practices will be banned ... And enforcement will be the rule, not the exception."

According to the bill, the new consumer unit will have the sweeping authority to impose fines and allow states to pass laws that are stricter than the federal standards.

Consumer protection is now re-enforced among various states and federal authorities, including the Federal Reserve, the Securities and Exchange Commission, the Federal Trade Commission and banking regulators.

The establishment of the new agency is part of what will be the most significant regulatory transformation in the United States since the Great Depression in 1930s.

Under Obama's plan to reshape financial regulations, the government will make the Federal Reserve a systemic risk regulator to oversee large institutions whose failure could threaten the stability of the entire system.

The reform also will create a council of regulators with broad coordination responsibility across the financial system. The council will discuss systemic risks but the Federal Reserve will not need its approval to act against them.

Hedge funds, derivatives and consumer mortgages, all blamed for the current crisis, will thus be under the supervision of the government.

Source: Xinhua