Washington ? Aiming for greater limits and more clarity in the nation’s financial system, the Obama administration on Monday proposed adding muscle to the Federal Reserve and new restrictions on complex securities whose collapse choked lending and hit millions of American households.

At the same time, the administration gingerly sidestepped some regulatory changes, leaving aspects of the politically charged work for Congress, which must approve the proposed blueprint.

Treasury Secretary Timothy Geithner said the regulatory overhaul will eliminate “gaps” in the financial system that encouraged risky behavior leading up to the meltdown.

Under the administration’s plan, all large institutions whose failure could threaten the stability of the financial system would be supervised by the Fed. That sets up a potential clash with some key lawmakers who believe the Fed is overtaxed and unaccountable to Congress.

Obama’s plan would create a council of regulators responsible for broad coordination across the financial system. Administration officials said it also would offer a stronger framework for investor protection.