Treasury Secretary Timothy Geithner today plans to announce a proposal to regulate derivatives, which were a key cause of the financial crisis.
According to published reports, the plan would impose regulations on derivatives, including credit default swaps.
The administration will ask Congress to enact capital and conduct requirements for those industries, according to The New York Times.
Geithner planned to announce his proposal later this afternoon.
It would be the first step of a planned overhaul of the regulation of financial services that President Obama has talked about since the campaign.
According to Investopedia, derivatives are securities whose price is dependent upon or derived from one or more underlying assets. The derivative's value is determined by fluctuations in the underlying asset
Credit default swaps are vehicles that allow owners of risky credit to transfer the risk to someone else.
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