By Kristina Cooke

NEW YORK (Reuters) - A gargantuan task faces whoever President Barack Obama picks to head up a new, powerful Treasury Department office charged with amassing intelligence on the financial system to help prevent future crises.

The office will have to gather information on a web of trillions of dollars worth of complex contracts and transactions so that a council of top regulators can spot threats to U.S. financial stability.

Depending on the vision of the person who is chosen to run it -- likely a renowned economist or academic -- it could resemble either a secretariat gathering and housing information or a huge separate research agency.

Much the way that the September 11 attacks on the World Trade Center showed the lack of communication between intelligence agencies, the financial crisis highlighted regulatory gaps that allowed risky behavior to grow unfettered.

Nine years after the 2001 attacks the intelligence community remains fragmented. Vince Reinhart, an economist at the American Enterprise Institute, says that presents a lesson for the new Office of Financial Research.

"What's scary is it could lead to lots of bureaucratic infighting," the former senior Federal Reserve staffer said. "The most relevant example is the intelligence community. Lots of duplication of effort, lots of agencies, lots of research produced that isn't read by anyone in particular. There is a real risk that that gets replicated here."

DARK CORNERS

The landmark regulatory reform bill Obama signed into law last week aims to stave off financial crises like the one that began sweeping the globe in late 2007.

To do that, a better view is needed of the risks lurking in dark corners of the financial system. That's where the new research office comes in, but exactly what role it will play is yet to be seen.

"Who they select to head this agency will reflect the White House's and Treasury's current vision on how it sits within the broader mosaic," said Christine Edwards, a partner at law firm Winston & Strawn LLP.

"Will it be an agency with massive resources or will it tap into the resources of the other agencies, and have leaner staff of high academic stature who can literally sit in a windowless room and raise issues?"

The director of the new office -- picked by the president and subject to Senate approval -- will also have substantial power. The official will be able to subpoena a financial firm to compel it to provide information needed to monitor systemic risks.

With the potential for broad risk to emerge from any part of the financial system there appear to be no clear limits on what type of data the office can subpoena, which has stirred concern among non-bank financial firms which worry it could become intrusive if left unchecked.

"What we don't want is a quasi-independent agency that runs amok," said one lobbyist, who requested anonymity.

Some non-bank lobbyists intend to press for greater information-sharing among regulators in the hopes of eliminating the need for some of the office's functions.

MAP OF COMPLEXITY

Another challenge will be amassing enough data to get a clear picture of hidden risks.

In an effort to better understand the roots of the financial crisis, economists at the New York Federal Reserve began putting together a map showing the tangled web of the largely unregulated, so-called shadow banking system -- a roughly $16 trillion complexity of financial intermediaries such as hedge funds and structured investment vehicles.

What started in 2007 as a small map tacked up onto the wall of the New York Fed's markets group has turned into a 36-inch by 48-inch poster as staffers gathered more information.

A year ago, economists at the New York Fed started to send around the poster and a paper detailing their findings around to peers at other central banks. http://www.newyorkfed.org/research/staff_reports/sr458.pdf

One way the new agency will plug information gaps is by building a reference database of financial instruments and financial companies.

Behind the scenes, academics and regulators have already begun to try to work out how to put this into practice.

But while databases of financial instruments will no doubt be helpful in monitoring the system, top-level analytics and technology will be needed to make the necessary connections.

"It's not entirely obvious to me that knowing what everyone is holding would mean we could necessarily then figure out what the pattern of contagion could be" in a crisis, Joseph Haubrich, head of the Banking and Institutions Group at the Cleveland Federal Reserve Bank's research department said last month.

As essayist Henry David Thoreau said: "It's not what you look at that matters. It's what you see."

(Additional reporting by David Morgan in Washington; Editing by Kenneth Barry)