Obama to call for U.S. financial product watchdog

The president is expected to formally unveil a set of proposals for tightening oversight of banks and markets on Wednesday, after six months of debate over strategies and with the economy still hurting from a severe financial crisis.

One key element in the administration's plan will be the creation of an independent Consumer Financial Protection Agency that will write and enforce rules on fair lending and other matters, according to a document obtained by Reuters that was later confirmed by an administration official.

To prevent future crises, the administration wants to give the Federal Reserve new powers to police "systemic risk" in the economy, in conjunction with a council of regulators.

They will also propose empowering the government to seize and unwind large, troubled companies; boosting bank capital and liquidity standards; and reining in markets for securitized debt and over-the-counter derivatives.

"There is going to be streamlining, consolidation ... so that you don't find people falling through the gaps," the president told reporters.

"Whether it's on the consumer protection side, the investor protection side, the systemic risks ... It's going to be a much more effectively integrated system than previously," he said.

Months of debate lie ahead. Congress has set more than a dozen hearings on financial reform between now and mid-July.

"We are going to put forward a very strong set of regulatory measures ... We expect that Congress will work swiftly to get these laws in place," Obama said.

"But it is going to be as usual, a heavy lift ... You'll hear a lot of chatter about 'We don't need more regulation' and 'government needs to get off our backs,'" he added.