WASHINGTON — Treasury Secretary Henry Paulson said Thursday that a presidential working group wants stronger regulatory oversight of mortgage lenders to avert the kind of credit crisis that is dragging the economy down.

In a new Bush administration initiative that Paulson said is not about "finding excuses and scapegoats," the group set up in the wake of the 1987 stock market crash calls for a series of actions designed to avert the kind of dual housing and credit slumps that are threatening to throw the nation into recession — if it isn't there already.

"The objective here is to get the balance right — regulation needs to catch up with innovation and help restore investors confidence but not go so far as to create new problems, make our markets less efficient or cut off credit to those who need it," said Paulson, who heads the working group..

One recommendation calls for federal and state regulators to strengthen oversight of mortgage lenders and another urges state financial regulators to implement strong nationwide licensing standards for mortgage brokers, Paulson said.

He also said there is a call for improvements by credit rating agencies that have been criticized for not accurately assessing risk on complex mortgage investments. These kinds of business transactions eventually soured, driving markets into chaos. Paulson also said that the working group is calling for better disclosures and assessments of risks.

The recommendations come as the meltdown in the housing and credit markets has unhinged Wall Street, catapulted home foreclosures to record highs and forced financial companies to rack up multibillion losses on bad investments in mortgage backed securities.

The mess threatens to plunge the country into its first recession since 2001.

The president's working group on financial markets was formed after the 1987 stock market crash to monitor markets. It includes Federal Reserve Chairman Ben Bernanke and the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission.

More recently, the group has been looking into the causes of the current credit crisis and searching for ways to prevent a recurrence.

In a speech to the National Press Club, Paulson said: "This effort is not about finding excuses and scapegoats. Those who committed fraud or wrongdoing have contributed to the current problems; authorities need to, and are prosecuting them. But poor judgment and poor market practices led to mistakes by all participants," he added.

The next step, Paulson said, is to push for implementation of the recommendations. He said the working group will continue to assess the situation and consider whether further steps are needed.

The working group also recommended that credit-rating agencies differentiate between ratings on complex investment products and conventional bonds, Paulson said. The ratings agencies also should disclose conflicts of interest, he said.

The group also called on issuers of mortgage-backed securities to provide more information about their products, Paulson said. The group urged investors to conduct more independent analysis of investments and be less reliant on ratings agencies, he said.

"There is no single, simple solution to the problems that have emerged ... yet we have determined that market participants' behavior must change," Paulson added.