U.S. President Barack Obama reaffirmed on Friday his pledge to tightly regulate financial derivatives, saying he would veto a planned financial regulation law if it did not bring the derivatives market "under control."

"I will veto legislation that does not bring the derivatives market under control and some sort of regulatory framework that assures that we don't have the same kind of crisis that we've seen in the past," Obama said during a meeting with his Economic Recovery Advisory Board (ERAB), led by former Federal Reserve chairman Paul Volcker, who believes that the unpoliced derivatives market is a major cause of the financial crisis.

The over-the-counter (OTC) derivatives are a financial instrument linked to one or more other assets, for instance a bundle of mortgages or debts.

The U.S. Congress planned to propose new rules on the 450 trillion dollars derivatives market -- the last unfinished piece of the sweeping financial bill.

The OTC derivatives component is one of the key sources of revenue for Wall Street bank giants, including Goldman Sachs, JPMorgan Chase, Morgan Stanley, Citigroup and Bank of America.

The Obama administration is pushing a strong financial overhaul.

The House approved a sweeping reform bill in December 2009. Senator Christopher Dodd, chairman of the Senate Banking Committee, proposed his own draft in February and now the bill is on the way to the Senate floor.

The House's bill would have to be merged with the Senate's version before a final measure could go to President Obama to be signed into law.

It is expected that the financial regulatory legislation will be concluded within weeks.