The Federal Reserve should not get new powers as part of the overhaul of financial regulation, a leading U.S. Senate Republican said on Monday.

Charles Grassley, the ranking member on the Senate Finance Committee, said the Federal Reserve should focus on monetary policy and should not necessarily get new powers to police risk across the financial system.

I don't think we ought to load any more on the Fed than what we've done, Grassley said during the Reuters Washington Summit.

Grassley expressed doubt that financial regulation reform would be completed this year -- a key goal of the Obama administration -- and spoke out against the administration's plans to create a new federal agency to protect consumers from risky financial products.

I don't believe in my own mind that we need a new Consumer Financial Protection Agency, he said at the summit, held at the Reuters office in Washington. We need to strengthen the agencies we have.

The Senate's time has been occupied for much of the year with healthcare reform, and the chamber has not made any significant progress on more than a dozen proposed financial reform bills that the administration has sent to Congress.

The House has made a bit more headway. The full House has passed a bill to put new curbs on executive pay, and the House Financial Services Committee last week moved forward new rules for the $450-trillion over-the-counter derivatives market.

A full House vote on financial reform is expected next month, but Grassley said he is not sure the Senate will act in time for legislation to be finalized by the end of the year.

Maybe the best answer is, it depends on how long it takes to do healthcare, Grassley said.

Indicating how much time and brainpower healthcare reform has consumed, Grassley said the only area in which he has formulated strong views about financial reform is in his opposition to create the Consumer Financial Protection Agency (CFPA).

President Barack Obama has proposed stripping the current bank regulators of their consumer protection roles, and housing them in a new agency. The CFPA would have broad powers to write and enforce rules on banks and financial firms that offer credit cards, mortgages, and other lines of credit.

Grassley said the government could more efficiently protect consumers from risky financial products by working through existing agencies, rather than creating another regulator.

He also voiced opposition to creating a new systemic risk regulator, and especially opposed giving that sort of responsibility to the Federal Reserve.

The Fed's got a full-time job on monetary policy, Grassley said.

The administration has proposed creating an inter-agency council of regulators to oversee risks to the economy from large, interconnected firms, with the Federal Reserve and Treasury Department in key roles.

The Obama administration had wanted to give the Fed a dominant position as systemic risk regulator, but that stance has softened in the face of widespread lawmaker skepticism.

Grassley said he would be concerned about empowering the government to try to reduce risk in the system, saying it could stifle innovation and economic growth.

I believe that, in the dynamics of our economy, that it would be just practically impossible to set up an entirely risk-free system without total government regulation, he said.

(Reporting by Karey Wutkowski, Editing by Anthony Boadle)