Republicans block Obama's Wall Street reforms

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Republicans block Obama's Wall Street reforms

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There has been a setback for Barack Obama and his reforms of Wall Street after Republicans in the Senate blocked his financial regulation bill.

The vote gives his opponents leverage to extract more concessions from Democrats on what is supposed to be the biggest ever overhaul of banking rules.

The US president wants to prevent a repeat of the 2008/09 financial crisis which tipped the economy into a deep recession.

Republicans say they see the need for reform but believe the Democrats’ bill goes too far.

Market Analyst Jeff Kleintop understands their reluctance.

“Clearly Wall Street needs regulation and better regulation than we had in place, and more empowered regulators, but I’m not sure that what we are seeing today in terms of proposals are going to get us to that endgame,” Kleintop said.

Included in the legislation is a new consumer watchdog, a mechanism to ensure taxpayers don’t bear the brunt of a failing bank bailout and get a say in top executive salaries.

Republicans and Democrats are expected to engage in some political horse-trading, with the bill returning to the Senate later this week.