A wide-ranging plan by the Obama administration to overhaul the financial system by regulating hedge funds and private equity drew a mixed response on Capitol Hill and in the industry on Thursday.
The Treasury secretary, Timothy F. Geithner, outlined the plan before the House Financial Services Committee, where he said the changes were needed to fix a badly flawed system that was exposed by the current financial crisis. Mr. Geithner, in his opening statement, called for “comprehensive reform. Not modest repairs at the margin, but new rules of the game.”
Under the administration proposal, hedge fund, private equity and venture capital fund advisers would for the first time have to register with the Securities and Exchange Commission. They would be required to provide the government — on a confidential basis — information on how much they borrow to leverage their investments as well as information about their investors and trading partners. The S.E.C. would then share those reports with a new “systemic risk regulator.”
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