Obama to announce Thursday tougher restrictions on size and complexity of banks

Building on his own proposals and the work of the House of Representatives, the president wants new federal government powers to limit the size and complexity of large financial institutions and to limit their ability to engage in high-risk trades.

Obama will make the announcement Thursday, a senior administration official said, in a bipartisan display aimed at capitalizing on the one issue in his agenda still standing after a devastating Democratic electoral loss in Massachusetts.

The president will be flanked by former Federal Reserve Chairman Paul Volcker and William Donaldson, appointed by President George W. Bush as head of the Securities and Exchange Commission. Both men have advocated tighter banking restrictions. Volcker heads the President's Economic Recovery Advisory Board.

Obama's announcement comes as the White House renewed Obama's demand that any overhaul of banking regulations contain an independent consumer financial protection agency. The proposed agency is one of the major sticking points in the Senate and the central focus of negotiations between Democrats and Republicans on the Senate Banking Committee.