Levey directs Treasury efforts to stop funding for terrorism, weapons proliferation, and illicit activities that could undermine the financial system.
He said the U.S. strategy of naming institutions and individuals it believes are helping finance illicit activity has been an effective upgrade of the traditional economic sanctions approach.
"What I think we’re likely to see and what I’m going to try to make happen is you’re going to see banks around the world ask themselves the question, ’Do I want to be Iran’s banker?’," he said.
Levey said tackling Iran was the "big, looming challenge" in U.S. efforts to dry up funding for terrorist activity worldwide.
"If you were to take all the money that terrorist organizations were able to raise, where’s it coming from? Well, first of all, number one on your list is going to be from the treasury of Iran," Levey said.
The United States accuses Iran of arming and funding the militant religious political group Hizbollah which has been fighting Israel from Lebanon.