Lawmakers in Washington have agreed a historic overhaul of US financial regulations – the most sweeping change in those rules since the 1930s.
Democratic Congressman Barney Frank, who headed the panel which wrote the new rules for Wall Street, together with Senator Christopher Dodd, was in tears as marathon overnight negotiations wrapped up.
Tougher oversight and regulation are aimed at avoiding a repeat of the crisis, during which floundering financial giants had to be bailed out with taxpayer money.
President Barack Obama praised the bill which dramatically reshapes the US financial landscape.
He said: “The reforms making their way through Congress will hold Wall Street accountable. So we can help prevent another financial crisis like the one that we are still recovering from. We will put in place the toughest consumer protection in our history.”
The legislation sets up a new consumer-protection authority and gives regulators new power to seize troubled financial firms before they harm the broader economy.
The financial reform bill tapped into public anger at an industry that gave itself rich payouts while much of the US struggled through a deep recession caused by its actions.
The effects of that recession are still being felt and the latest data showed US economic growth between January and March was slower than previously estimated at a 2.7 percent annual rate.
Consumer and business spending was less than originally calculated by the US Commerce Department; home building and purchases of property are also faltering.