WASHINGTON, March 13 (UPI) -- U.S. Treasury Secretary Henry Paulson announced sweeping regulatory changes Thursday meant to reign in the current credit market crisis.
But, he stressed there was "no silver bullet" that would correct all the market's current woes.
Speaking for the President's Working Group on Financial Markets, which represents the Treasury, the Federal Reserve Bank, and the Securities Exchange Commission, Paulson called for greater "transparency" from banks and stronger risk management regulations.
He also called for greater scrutiny of credit rating firms like Standard & Poor's and Moody's.
The mortgage crisis is thought to originate, in part, with independent mortgage brokers, who passed on mortgages to finance companies before they were repackaged and resold to investors around the world, The New York Times reported.
Critics say the independent brokers wrote deals with little regard to credit risk.
Paulson said rating concerns would need to disclose all conflicts of interest and "clearly differentiate" between complicated and standard corporate bonds and municipal securities.
The first move that would reveal if rating companies were receiving kickbacks.
"No silver bullet exists to prevent past excesses from recurring," Paulson said at the National Press Club in Washington. But, the new regulations were "a good start," he said.
