End of an era of excess for Wall Street

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End of an era of excess for Wall Street

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The US senate has approved the biggest overhaul of financial regulation since the 1930s.

It is a major victory for President Barack Obama, who has championed tighter regulation for banks and financial markets.

He says the reforms will protect consumers and the economy, as well as holding Wall Street accountable.

“Because of financial reform the American people will never again be asked to foot the bill for Wall Street’s mistakes,” said the US President. “There will be no more taxpayer funded bailouts. Period. If a large financial institution should ever fail, we will have the tools to wind it down without endangering the larger economy.”

The Senate voted 60 to 40 in favour of the bill, which includes measures opposed by banks such as a requirement they spin off their lucrative swaps trading desks.

Some say profits will be reduced for years to come, but Obama insists the bill will not stifle the free market.

It now needs to be reconciled with a version passed by the House of Representatives in December.

Meanwhile US Treasury Secretary Timothy Geithner is heading to Europe next week for talks with Britain and Germany about the Eurozone debt crisis.