Who wants to regulate what?

WASHINGTON -- The $700 billion mortgage bailout in the works this week, on top of other bailouts and the failures of venerable financial institutions, has infused the presidential campaign with fresh debate over the purpose and limits of federal regulation.

For two decades, Democratic and Republican administrations alike have eased the federal oversight, supervision and regulation of the financial services industry in reaction to globalization and the emergence of new technologies and markets.

Now, amid fears of the deepest global financial crisis since the Great Depression, that trend may have come to an end. Here's how the two candidates say they would use regulation to prevent new crises:

OBAMA

KEY POSITIONS

* Create a financial market oversight commission to monitor the system and advise the president and Congress on how to prevent new risks from boiling over.

* Require banks and other financial institutions that are eligible to borrow from the Federal Reserve to keep higher reserves of cash on hand.

* Investigate rating agencies to guard against potential conflicts of interest.

* Standardize mortgage lending regulations so that the same rules that apply to mortgage brokers also apply to commercial banks and thrift organizations.

RECORD

Introduced 2006 legislation aimed at ending home loans based on fraud, abuse or excessive risk. Has long warned against the risks of financial losses in the billions of dollars as a result of insufficient government oversight of high-risk areas, particularly those involving subprime mortgages and loans that exceed what consumers are able to bear.

McCAIN

KEY POSITIONS

* Strengthen financial regulatory agencies' ability to protect consumer savings and investments.

* Strengthen disclosure rules to increase transparency of mortgage-backed securities and other complex investment instruments.

* Consolidate and reorganize the Securities Exchange Commission and other federal regulatory agencies to reduce overlapping responsibilities and plug gaps.

* Reduce the amount of debt and risk that banks and other financial institutions may assume.

RECORD

Has spoken out against the "excess" of executive pay and severance packages on Wall Street. Voted in 2002 to support legislation aimed at strengthening regulation of the accounting industry following the collapse of energy trader Enron Corp. But told The Wall Street Journal last March, "I am fundamentally a deregulator."