Senate approves Wall Street reforms
New York, May 21, 2010
The US Senate approved a sweeping Wall Street reform bill on Thursday night, capping months of wrangling over the biggest overhaul of financial regulation since the 1930s.
By a vote of 59-39, the Senate awarded a victory to President Barack Obama, a champion of tighter rules for banks and capital markets after a 2007-2009 financial crisis that slammed the economy and led to massive taxpayer bailouts.
The Senate bill must now be merged with a measure approved in December by the US House of Representatives. Only then could a final package go to Obama to be signed into law, something that analysts said may happen next month.
Changes proposed in both bills - driven by lawmakers eager to look tough on Wall Street before congressional elections in November - threaten to constrain the banking industry and reduce its profits for years to come.
Flashpoints in the House-Senate negotiations will likely include a controversial proposal to curb bank swap-trading.
Obama said the final version of the bill would hold financial firms accountable but not stifle the free market.
'Over the last year, the financial industry has repeatedly tried to end this reform with hordes of lobbyists and millions of dollars in ads, and when they couldn't kill it they tried to water it down. Today, I think it's fair to say these efforts have failed,' Obama said.
'We've still got some work to do,' he added. 'The House and the Senate will have to iron out the differences between the two bills. And there's no doubt that during that time the financial industry and their lobbyists will keep on fighting.'
Dow Jones tumbles
On Wall Street on Thursday, the Dow Jones industrial average slid 3.6 per cent, hurt by fears of Europe's debt crisis retarding global economic recovery, but also by uncertainty over US financial reform, traders said.
Barney Frank, head of a key House panel, told CNBC it was important to complete reform soon to ease uncertainty.
Frank, the Democratic author of Wall Street reform in the House, on Thursday drew an early negotiating line ahead of impending talks with the Senate on a final package.
In letters to senior Senate Democrats that were obtained by Reuters, Frank said certain House proposals on financial firm regulation and bank trading limits must be preserved.
He said the House proposals were important to his home state of Massachusetts and that 'none of them threaten or weaken the broad objectives of comprehensive reform. I will insist that they be maintained in the final bill.'
The letters were addressed to Senate Democratic leader Harry Reid and Banking Committee Chairman Christopher Dodd, the Democratic author of the Senate bill. Both will likely be key players, along with Frank, in the House-Senate talks.
'I look forward to working with my colleagues in the House to produce a strong bill,' Dodd said in a statement.
In the Senate vote, four Republicans sided with the Democrats for approval: Susan Collins, Olympia Snowe, Charles Grassley and Scott Brown. Two Democrats voted against the bill: Maria Cantwell and Russ Feingold.
Democrat Arlen Specter, who lost a re-election primary on Tuesday, did not vote. Nor did Democrat Robert Byrd.
'For those who wanted to protect Wall Street, it didn't work. They can no longer gamble away other people's money,' Reid told reporters after the late-evening vote.
Dodd said he hoped the Senate would be able to vote to approve a final House-Senate package by July 4.-Reuters