The fight for the presidency is over, but the battle over the future of financial services has just begun.

President-elect Barack Obama will have a long and varied to-do list, including long-term priorities such as rewriting the charters of the government-sponsored enterprises, and extricating the government from the banking business.

The largest challenge—and one likely to take some time—will be rewriting the financial regulatory system.

How and in what order the president-elect will tackle these issues is unclear, but observers agree he will have to move quickly. "It will be very similar to the 1933 New Deal, where you have to come in and [take] some fairly tough action," says William Longbrake, a director of First Financial Northwest Inc. in Renton, Wash., and a former vice chairman of Washington Mutual Inc.

Current Treasury Secretary Henry Paulson teed up the financial regulation issue this year, unveiling a blueprint that would essentially boil down the regulatory system to three entities: the Federal Reserve Board, which would oversee systemic risk; a banking safety-and-soundness regulator; and an agency to oversee business conduct. Lawmakers have promised to start early next year on their own version of reform, and observers say the next president will have little choice but to offer his own plan quickly.

"[President-elect Obama] will be faced with the task of architecture, rewriting the regulatory system," says Randal Quarles, managing director of Carlyle Group and a former Treasury undersecretary in the current administration. "I think political consensus will exist for doing that in a comprehensive way, which is something you know has been needed to be done for a long time, but [has lacked the] political consensus to do it."

Scott Talbott, senior vice president of government affairs of the Financial Services Roundtable, says the new president's "challenge will be to find a way to modernize the regulatory structure to prevent this from happening again."

That task may have been complicated by efforts to unclog the credit markets. In recent weeks the government has given more than $125 billion of capital to the largest banking companies, and some large institutions have become even larger as a result of acquisitions. To be sure, this has brought another issue to the fore that Obama must face: how to deal with firms that are too big to fail.

Jaret Seiberg, an analyst with Stanford Group Co., says: "Regulatory restructuring is coming. The market has forced the hand of government. The old way just doesn't make sense anymore."

Another long-term challenge will be getting the government out of the role of private-sector banking. The Treasury Department has taken equity stakes in 36 banks, injecting $170 billion of capital so far. The government is expected to divest itself of those shares within three to five years, but some said that may prove difficult.

Brian Gardner, a political analyst at Keefe, Bruyette & Woods Inc., says he is pessimistic that the government can untangle itself easily. "That's a naive idea," he says. "It is tough to see how the government is getting out of the business of banking."

The new administration also will have to decide the fate of Fannie Mae and Freddie Mac. When they were put into conservatorship in early September, Paulson said the existing model-public ownership with a government mission-did not work. He recommended that the next administration rewrite their charters.

As the new president, Obama also will confront more immediate problems. Many observers question whether the Treasury will have spent much or all of the $700 billion Congress allocated as part of the rescue bill by the time the new president takes office. Even if some funds are left over, President-elect Obama would have to decide how to spend them-on more capital infusions, or on purchases of troubled assets, its original mandate.

Some observers expect the next administration to ask for more money but take steps to ensure more requirements are made of beneficiaries of a future plan. "If there is a second equity offering or a new program in TARP [the Troubled Assets Relief Program], I definitely believe there will be greater strings attached than what was in the first capital program," Gardner says.

The new president is also expected to have to focus more on foreclosure mitigation. "There's no question that one of the things [President-elect Obama] will want to do...is focus more on the mortgage foreclosure problem," says Paul Lee, a partner at Debevoise & Plimpton LLP and a former Treasury official. "In a Democratic administration, there will be more focus on the Main Street problems."