In widely-anticipated remarks delivered today, U.S. Treasury Secretary Henry Paulson discussed a newly-released report by the President’s Working Group on Financial Markets that makes broad recommendations for policy and legislative action in the months ahead. The group — which includes the Treasury, the Fed, FTC and SEC — had been tasked by the President with analyzing current market turmoil and putting recommendations in place to prevent such a scenario from playing out again.

Securitization, in general, garnered most of Paulson’s and the group’s focus. “There is no single, simple solution to the problems that have emerged from the mortgage securitization process, yet we have determined that market participants’ behavior must change,” he said. The working group called for uniform national licensing standards for mortgage brokers, and new standards of disclosure for borrowers, while also forcefully recommending that rating agencies differentiate corporate and municiapal structured finance products. Paulson said the group will form a private-sector committee to work toward implementation of a new set of standards for the rating agencies, and threatened strong and potentially restrictive oversight by Federal regulators if market participants — Standard & Poor’s, Moody’s Investors Service and Fitch Ratings — can’t drum up a solution. He also said the Treasury and SEC will look to implement new rules for issuers in securitization trusts, ensuring due diligence up front and forcing more thorough disclosures. “Issuers of mortgage-backed securities will disclose the level and scope of due diligence performed on underlying assets, disclose more granular information regarding underlying credits,” Paulson said. “And, if issuers have shopped for ratings, disclose the what and why of that as well.” “No silver bullet exists to prevent past excesses from recurring,” he said. “But I believe today’s recommendations put us on the path towards more transparent, better-functioning, and better-managed markets.” Many of the remarks echo statements by Paulson and other administration officials in recent months, but represent a crystallization of how Federal regulators now intend to pursue industry reform as the financial markets continue to reel from a historic meltdown in the mortgage industry.