Financial commentators in the United States say that President Obama's proposals for regulatory reform, announced Wednesday, could face significant opposition in Congress.
The proposals give greater power to the central bank, the Federal Reserve, to regulate banks and other financial institutions. Mr Obama says the lack of oversight among finance firms prompted systemic abuse, causing risks for both companies and individuals.
Big banks will also be required to put more money aside against future losses in order to curb excessive risk-taking.
New powers to protect consumers and investors
A new Consumer Financial Protection Agency will be created and the Federal Trade Commission will gain new powers to protect consumers, as well as more powers for the Securities and Exchange Commission, for the benefit of investors.
A new council of regulators, the Financial Services Oversight Council is to be created to co-ordinate the supervision of the banking system.
There will be more regulation of hedge funds, securitised debts and over-the-counter derivatives, all of which have been blamed for exacerbating the financial crisis. It is intended that shareholders will have more power to question executive bonuses.
'If this happened in Venezuela or Russia ... '
Even staunch free-market advocates agree on the need for streamlining the patchwork US regulatory system for financial institutions, but views on other aspects of the plan are more divergent.
Some say it doesn't go far enough, while others argue it will give the government too much power in the private sector.
Especially contentious is a measure that would allow the Federal Reserve to intervene in firms that could pose a threat to financial stability, even those that do not own banks.
"The idea of the government taking over companies that have problems because it decides they are too big to fail invites political cronyism as we saw with Chrysler and General Motors," says Diana Furchtgott-Roth, a senior fellow at the conservative Hudson Institute.
"If this happened in Venezuela or Russia we would be decrying this."
'Only half of the equation'
On the other hand, "The administration's reform proposal hits the nail on the head on many issues," says Hal Scott, a Harvard Law School financial scholar who heads the Committee on Capital Markets Regulation, a non-partisan group of US business and academic leaders formed in 2006.
But in his view the plan is "only half of the equation"; broader reform is needed.
"Now is precisely the moment to deal a death blow to the jurisdictional squabbling and turf battles that contributed to the archaic structure that fell short in preventing the crisis or dealing with it when it occurred," Mr Scott says.
"We believe that the final reform legislation must go significantly further that what the administration has proposed."