The Senate and the Obama administration are close to agreeing on forming a new regulatory council, led by the Treasury Secretary, to identify systemic risk to the nation's financial system, the New York Times on its Web site cited officials as saying Wednesday.

"The idea of having a council, with the secretary of the Treasury as chair, and the Fed chairman or his designee as vice chair, is that you're getting an early-warning system," chairman of the Senate Banking Committee, Christopher J. Dodd, Democrat of Connecticut, told the newspaper.

Senators from both parties support the idea of tasking the Treasury Department with spotting trouble early, although several important provisions have to be worked out, the newspaper reported.

Whether or not the council could bypass existing banking regulators and impose its own rules on huge financial firms is one of the provisions, according to the newspaper.

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