Page last updated at 22:13 GMT, Friday, 11 December 2009

US House of Representatives backs financial reform bill

US President Barack Obama
President Obama welcomed the passing of the bill

The US House of Representatives has approved the most sweeping changes to the country's financial sector since the Great Depression of the 1930s.

The 223 to 202 vote is a victory for President Obama who has made financial reform one of his main goals.

The bill aims to create a new agency to monitor consumer banking transactions and give the government powers to break up companies that threaten the economy.

The US Senate will have to pass the bill before the president can sign it.

The legislation would give regulators the power to dismantle the companies in a way which ensures shareholders and unsecured creditors, not taxpayers, bear the losses.

It also hopes to strengthen the powers of the Securities and Exchange Commission to detect irregularities that could provide an early warning of fraudulent investment schemes.

Plans to regulate the vast $600 trillion market in products called derivatives are also included.

The Federal Reserve would be given powers to oversee large firms at risk of collapse.

The Government Accountability Office, the investigative arm of the US Congress, would also be given more power over the Federal Reserve.

President Obama welcomed the outcome of the vote, calling it "another important step closer to necessary, comprehensive financial reform that will create a more stable financial system."

He called on the Senate to pass the legislation as quickly as possible.

The president has blamed Wall Street and government failures for the financial crisis.

He said reforms should promote sound investment, encourage competition and innovation and prevent a crisis from recurring.

All of the chamber's Republicans along with 27 Democrats voted against the bill.

Print Sponsor

US extends executive pay limits
11 Dec 09 |  Business
US bank bail-out scheme extended
09 Dec 09 |  Business
US bail-out fund could boost jobs
07 Dec 09 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2019 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific