US House approves financial reforms
House of Representatives approves most sweeping reform bill since Great Depression.
The legislation would give the government new powers to break up companies that threaten the economy and dismantle them in a way that ensures shareholders and unsecured creditors, not taxpayers, bear the losses.
Consumer protection
It would also lead to the creation of a new agency that would take over consumer
protection powers from current banking regulators, and examine more closely financial markets that have escaped the oversight of regulators.
It also reinforces the powers of the Securities and Exchange Commission to detect irregularities that could provide an early warning of fraudulent investment schemes.
The legislation aims to prevent manipulation and bring transparency to the
$600 trillion global derivatives market.
It would give the Federal Reserve more powers to oversee large companies at risk of collapse, but also give the Government Accountability Office, the investigative arm of the US congress, more power over the Federal Reserve itself.
The bill has drawn fierce opposition from the financial sector and from Republicans, all of whom voted against it.
The US senate will have to pass the bill before Obama can sign it.