Bank regulation bill passed in US Senate

Calcutta News.Net
Friday 16th July, 2010

The US Senate has decided to approve what will be the biggest overhaul of American financial regulation in many years.

The reforms, intended to avert a repeat of the 2008 economic crisis, brought the world economy to the brink of collapse.

The Senate vote have given a major victory to President Barack Obama who has worked to ensure the passage of the bill, which will give consumers strengthened protection.

After the passing of the bill, Mr Obama said the American people would never again have to foot the bill for Wall Street's mistakes.

The 2,300 page bill is stuffed with 533 new regulations, which are designed to reduce the risks that banks take and to boost protection for consumers.

They allow the government to break up any company that becomes so big its failure could threaten the economy.

The bill, to be called the Volcker rule, after former Federal Reserve chairman Paul Volcker, who proposed it, will also ban banks from taking bets on financial markets using investor money.

The banks will also be limited to investing a maximum of 3% of their capital in speculative businesses such as hedge funds or private equity funds.

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