Calling for "strong rules of the road" to guard against systemic risks, Obama called for closing the loopholes and giving regulators more authority.
"We'll create clear accountability and responsibility for regulating large financial firms that pose a systemic risk," he said.
"While holding the Federal Reserve fully accountable for regulation of the largest, most interconnected firms, we'll create an oversight council to bring together regulators from across markets to share information, to identify gaps in regulation and to tackle issues that don't fit neatly into an organizational chart," the president said.
The third part of the president's proposal is to strengthen international cooperation to spur global demand and address the underlying problems that caused the recession.
"Taken together, we are proposing the most ambitious overhaul of the financial system since the Great Depression," he said.