The U.S. banking industry played down the Obama administration's proposals on Monday for the most wrenching regulatory changes since the Great Depression as just that -- proposals.

Bankers, and their lobbyists, were careful not to attack the plan, which was broadly outlined in a Washington Post op-ed piece by Treasury Secretary Timothy Geithner and White House National Economic Council Director Lawrence Summers, head on. Instead they talked about waiting to see the details due on Wednesday.

Have we had enough say yet? No, but the process has really just gotten started, said Wayne Abernathy, executive director for financial institutions policy at the American Bankers Association.

The plan includes raising capital and liquidity requirements for all banks, controls on asset-backed securities including a requirement that their creators retain some risk, and the regulation of derivatives contracts and dealers.

The proposals will have to travel through congressional committees in a process that will likely extend through fall.

One financial industry lobbyist, who did not want to be identified because he is not authorized to speak publicly on the matter, estimated that even after amendments, the bill would have less than a 60 percent chance of passing.

Some parts, such as consumer protection and rules requiring banks securitizing assets to retain some of the risk, might be stripped out, he predicted.

But what he perceived to be the administration's two highest priorities -- forming a systemic risk regulator and granting resolution authority for the U.S. Treasury -- would likely remain.


At stake is a complete overall of a system that allowed high risks and high rewards.

We are going to have to wait and see what actually is announced and then make an evaluation, Richard Parsons, chairman of Citigroup's (C.N) board, said at a forum sponsored by Time Warner (TWX.N) in New York.

Some bank executives said the financial crisis has already altered banks' businesses to such an extent that it is hard to see the days of high leverage and high profits returning even without additional regulation.

I'm not so sure we go back to the world we were in, said Vikram Pandit, chief executive of Citigroup, speaking at the National Summit in Detroit. He noted that the cost of capital is higher than five years ago. Additional regulation may further raise the cost of capital.

The government is wary of toppling the fragile financial markets' recovery with onerous regulation, while also seeking to prevent a crisis on this scale from recurring.

Congress and the administration didn't step in to save the financial institutions because they loved the financial institutions, said Brad Hintz, an analyst at Sanford C. Bernstein, adding, They saved them because the country needs the capital markets.

I don't think that any rules are going to be written with the idea of punishing the banks. It's going to be to make them safer, he added.

The banks may also be hoping that, as with proposals earlier this year to tax 90 percent of bank executives' bonuses, a sophisticated lobbying effort in Washington could persuade lawmakers that parts of the bill go too far.

(Reporting by Elinor Comlay, additional reporting by Joseph A. Giannone, Karey Wutkowski, Steve Eder; Editing by Leslie Gevirtz)