The U.S. Treasury Department today released its plan for an improved financial regulatory structure, which it says will strengthen consumer protection, improve tools for market stability, and enhance financial innovation.

The so-called “Blueprint for a Modernized Financial Regulatory Structure” includes a series of short-, intermediate- and long-term recommendations for reform of the U.S. regulatory structure.

The short-term recommendations include improvements to regulatory coordination and oversight. It recommends creating a new federal commission for mortgage origination to protect consumers better. The report also recommends modernizing the President’s Working Group on Financial Markets and clarifying the Federal Reserve’s liquidity provisioning.

Intermediate-term recommendations focus on eliminating some of the duplication in the existing regulatory system, and offer ways to modernize the regulatory structure for certain financial services sectors, within the current framework.

Recommendations include eliminating the thrift charter, creating an optional federal charter for insurance and unifying oversight for futures and securities by merging the SEC and CFTC. It also recommends the adoption of core principles for exchanges and clearing agencies, an expedited SRO rule approval process, a general exemption for already actively trading exempt products, such as exchange traded funds, to improve the new product approval process, and new legislation to permit a new global investment company.

The long-term recommendation is to create an entirely new regulatory structure using a principles-based approach. The structure will consist of a market stability regulator, a prudential regulator and a business conduct regulator with a focus on consumer protection.

Treasury secretary, Henry Paulson, stressed that these proposals have been in the works for over a year now, and are not merely being proposed in response to the current market turmoil. Rather, he said, the reform is required to modernize a system that needs to catch up with market developments. He also said that implementation of the changes shouldn’t take place until markets have emerged from the current turmoil.