The most radical overhaul of the nation's financial regulatory system since the Great Depression. That's how many Wall Street observers are describing the ambitious package of reforms contained in the vast 218-page plan proposed Monday by Treasury Secretary Henry Paulson.

Much of Paulson's complicated blueprint is so technical that only Wall Street mavens and regulatory bureaucrats can understand it. It will be studied for weeks and months to come.

But the most essential elements of Paulson's plan calls for providing the Federal Reserve Board with expansive new authority to deal with potentially troubled banks and brokerage firms.

The Fed, in addition to its current authority of controlling the nation's short term interest rates and money supply, would also become one of three "super-regulators" that would replace a bevy of overlapping public agencies.

Consolidation, when it is done right, can improve efficiency by getting rid of unneeded bloated and confusing-to-the-public bureaucracies. This is why the treasury chief also urges merging the Securities and Exchange Commission with the Commodities Futures Trading Commission -- a proposal that impresses many regulatory critics.

"The SEC, particularly with the advent of the Sarbanes-Oxley accounting mandates, investigates far too much minutiae that don't pose a systemic risk (to the financial system," says Competitive Enterprise Institute financial expert John Berlau. "Getting rid of this excess and redundancies ... would benefit entrepreneurs and investors."

The Institute, however, is a good deal less than enthusiastic about expanding the Federal Reserve Board's powers. "To propose, as the blueprint does, that the Fed can examine any business that poses a threat to the financial system would result in an unacceptably broad jurisdiction," says Berlau. "Many small entrepreneurs may suddenly find themselves at the Fed's mercy. Federal statutes and rules have already stretched the definition of 'financial institution' to include such diverse businesses as jewelry stores, car dealers, and travel agents."

Paulson says his blueprint is long term, and admits it does nothing about the immediate subprime mortgage mess that is slowing the economy and roiling the equity markets because, he says, the Fed's recent timely actions and Congress' stimulus package already are dealing with that.

One reform he believes could become a reality before the Bush administration leaves office is his proposed Mortgage Origination Commission. The new commission would have no real power of its own, but it would establish minimum standards for mortgage brokers and state regulatory agencies to follow voluntarily, Paulson said, and shine the public spotlight on them when they fall short.

"It's a simple idea," he told Forbes.com. The commission could discourage "real bad mortgage origination practices coming out of a lot of state regulated entities."

That would certainly be an improvement on the status quo.

Overall, Paulson's proposals are packed with new ideas, some good and some not so good, but don't expect them to be sorted out this year. What he's done is raise a lot of financial regulatory issues for a new Congress and new administration to vet next year.