US Treasury Secretary Henry Paulson will today unveil a series of measures giving new powers to the Federal Reserve as a "market stability regulator".

Although the measures will do little more than formalise the role the Fed has already taken to provide liquidity to investment banks, it is a departure from the Bush White House's previous laissez-faire approach to regulation.

The new rules will give the central bank power to demand that all financial-system participants supply it with full information on their activities, and grant the Fed a right to collaborate with other regulators in setting rules for their behaviour.

The chaos in the markets following the subprime mortgage meltdown is increasingly blamed on slack enforcement of existing rules.

Paulson acknowledges the current system is full of "regulatory gaps as well as redundancies" and will set out an ambitious schedule to streamline it. But critics say the measures have little chance of being enacted in President Bush's remaining 10 months.

There is increasing focus on practices in the mortgage market where many loans were made without basic fact-checking. Some lenders did not even verify whether borrowers actually earned the incomes they claimed.