The Obama administration moved on Wednesday to shed more light on the over-the-counter derivatives market, a once-booming shadow banking system that is now closely linked to the global credit crisis.

Authorities proposed subjecting all over-the-counter derivatives dealers to a robust regime of prudential supervision and regulation, including conservative capital, reporting and margin requirements.

Treasury Secretary Timothy Geithner, Securities and Exchange Commission Chairman Mary Schapiro, and Mike Dunn, acting chairman of the Commodity Futures Trading Commission, announced the proposal at a news conference.

Under current law, over-the-counter (OTC) derivatives are largely excluded or exempted from regulation.

We're going to require for the first time all standardized over-the-counter derivative products be centrally cleared, said Geithner. This is an important beginning with an important set of proposals.

Globally, the OTC derivatives market is pegged at about $450 trillion, with the notional value of interest-rate swaps put at $403.1 trillion, the value of credit default swaps at $38.6 trillion and equity derivatives at $8.7 trillion.

Officials did not make clear which agency would be in charge of cracking down on the market. They said they would work together to prevent forum shopping for weak rules.

Lawmakers have disagreed over which federal agency should oversee clearing of OTC derivatives.

The administration's plan would ask Congress to amend securities and futures laws to require more reporting of trading in non-standard OTC derivatives.

Besides requiring clearing of standardized OTC derivatives, the plan would let the CFTC set limits on OTC derivatives that affect prices on public exchanges.

Clearinghouses are widely used to bring liquidity into a market and bring trading into the open. Because members of a clearinghouse are obligated to absorb losses, they are expected to carefully gauge risk and set margin requirements on financial instruments. Clearing also shows how much exposure is held by a market participant.

Following last year's market turmoil, U.S. regulators urged creation of clearinghouses to stabilize the market in credit default swaps, valued in trillions of dollars.

Exchanges have already begun to jockey for business clearing OTC financial derivatives.

The Intercontinental Exchange and CME Group Inc , which runs the Chicago Mercantile Exchange, are the two main contenders in the race, with ICE benefiting from support from large dealers that own a stake in the company.

The ICE began clearing credit default swaps in March.

(Reporting by Charles Abbott and Kevin Drawbaugh; editing by Tim Dobbyn)