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US senate backs financial reforms

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US senate backs financial reforms

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The US Senate has approved the biggest shakeup of American financial regulation in decades.

The reforms impose lending restrictions on banks in a bid to avoid a repeat of the recent crisis that almost brought the world economy to its knees.

The bill passed by 60 votes to 39 after several months of political horsetrading.

The government will get new powers to break up financial institutions if their collapse would threaten the entire US economy.

A new federal watchdog will oversee consumer lending, while big banks will be made to hold larger capital reserves to protect themselves against bad loans.