The administration is also preparing to require that derivatives like credit default swaps, a type of insurance against loan defaults that were at the center of the financial meltdown last year, be traded through a central clearinghouse and possibly on one or more exchanges. That would make it significantly easier for regulators to supervise their use.

Officials said that the proposals were aimed at the core regulatory problems and gaps that have been highlighted by the market crisis. They include lax government oversight of financial institutions and lenders, poor risk management efforts by banks and other financial companies, the creation of exotic financial instruments that were not adequately supported by their issuing companies, and risky and ill-considered borrowing habits of many homeowners whose homes are now worth significantly less than their mortgages.

“I believe that our regulatory system failed to adapt to the emergence of new risks,” Mr. Geithner said in a written response to questions that was made public on Friday by Senator Carl Levin, Democrat of Michigan. “The current financial crisis has exposed a number of serious deficiencies in our federal regulatory system.”

Image Our regulatory system failed to adapt to the emergence of new risks, wrote Timothy F. Geithner, center, Treasury secretary nominee. Credit... Stephen Crowley/The New York Times

The regulatory changes are a major piece of a broader package being prepared by the new administration to address the market crisis. Another piece to be issued soon will provide the strategy for how the government will go about repairing the declining banking industry. Congress recently approved the second $350 billion in spending from the Troubled Assets Relief Program.

The White House has come under increasing political and market pressure to disclose how it intends to manage the program, and there is nervous expectation on Capitol Hill that the administration will need to spend more than $350 billion. That plan is expected to focus on reducing foreclosures, revising the bank bailout program, and buying or issuing guarantees for the rapidly deteriorating assets that have been discouraging more private investment in the banks.

Senior aides have vowed to move quickly on the administration’s financial regulatory agenda. The Emergency Economic Stabilization Act, approved last fall, requires the White House to make regulatory recommendations to Congress by April 30, although the administration is preparing to make legislative and regulatory proposals sooner.