The Investment Company Institute said it welcomes Treasury Secretary Henry Paulson’s plan to overhaul the financial system’s regulation apparatus.

“ICI commends Secretary Paulson on a penetrating examination of our current financial regulatory structure, and on a bold concept of the reforms needed to make that structure more appropriate to today’s markets and more effective in protecting consumers and promoting competitiveness,” said Paul Schott Stevens, ICI president and CEO.

The plan includes a proposal to expand the Federal Reserve’s authority to examine investment banks and other financial institutions when they threaten the financial system as a whole, such as the bookkeeping at brokerage firms, hedge funds and commodity trading exchanges.

Critics say the plan does not do enough to fix the risky practices that led to the mortgage crisis, but Paulson said the plan is not intended to be a response to the housing crisis, but part of a broader effort to change regulations.

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