The Obama administration will tighten up risk control of financial firms and impose more strict rules against financial fraud, US Treasury Secretary Timothy Geithner said on Wednesday.

Addressing the Council on Foreign Relations in New York, Geithner said that the government needed the expanded powers in order "to help ensure that this country is never again confronted with the untenable choice between meltdown and massive taxpayer bailouts."

"Tomorrow, I will lay out the administration's broad framework for dealing with the kind of systemic risk that AIG (American International Group, Inc.) posed," Geithner said. "The framework will significantly raise the prudential requirements, once we get through the crisis, that our largest and most interconnected financial firms must meet in order to ensure they do not pose risks to the system."

The framework will seek to give the Treasury and Federal Deposit Insurance Corp. to take over failing financial institutions and wind them down, according to Geithner.

Geithner testified before Congress on Tuesday about the need for legislation that would give the government the authority to help a non-bank firm whose troubles could pose such a threat, but also the authority to become its conservator or receiver with the power to protect the financial system against instability.

In his prepared remarks on Wednesday, Geithner also revealed that the US government will propose new and stronger rules to protect American consumers and investors against financial fraud and abuse.

"Our plan will not focus solely on financial regulations in the United States, but -- with the help of other interested nations and strengthened international bodies -- on stronger standards globally, as well," said Geithner.

When asked about the dollar's status as reserve currency, Geithner said that he expected that the dollar would remain the world's "dominant reserve currency."

(Xinhua News Agency March 26, 2009)