The Treasury Department is still fleshing out the details of its proposal to curb the size and activities of the largest banks, a top official said Monday, though a key distinction would be whether firms are backed by the Federal Deposit Insurance Corp.

Deputy Secretary Neal Wolin said department?officials will spend the next several weeks drafting legislation, which will then be shared with House and Senate lawmakers working on a broader overhaul of financial regulation.

He reiterated comments made by officials last week that the goal of the new proposal is to bar banks from owning hedge funds or private-equity divisions or engaging in proprietary trading.

"Either you're going to be a bank or bank holding company or you're going to engage in these risky activities," Wolin told reporters.

Though many details remain to be determined, some parts of the proposal have begun to take shape.

Wolin said firms would be subject to the restrictions if they are FDIC-insured or own an FDIC-insured bank, including any foreign bank with a U.S. branch. While details are still being finalized, he acknowledged that a commercial bank that does not accept consumer deposits and is not insured by the FDIC would not be subject to the constraints on risky activities.

Wolin stressed, however, that even firms that do not fall under the size and activities restrictions would still be subject to the more aggressive consolidated supervision envisioned in the Obama administration's broader regulatory overhaul efforts.

"All major firms, whether they own a depository institution or not, will be subject to consolidated supervision. This is not a question of whether you are in or out of that regulatory regime," he said.

The proposal announced by President Obama last week would also regulate the size of firms, toughening an existing cap on the market share an individual bank can control.

Wolin said the rules were not intended to "force the restructuring on a size basis of existing firms."

Rather, the goal is to control companies' future growth.

"This is meant to be a constraint on growth by acquisition rather than a limit on organic growth," he said.

Wolin also played down how quickly any new rules, if they are enacted into law by Congress, would affect major financial firms.

Any new restrictions would include an "appropriate period of transition," he said.

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