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Financial Overhaul Legislation Fails in Senate Test Vote


A measure designed to overhaul the U.S. financial regulatory system has hit a road block in the Senate, failing in a procedural test vote on Monday.

All 41 Senate Republicans voted against formally starting debate on the legislation, which would create the most sweeping new controls on U.S. financial institutions since the Great Depression of the 1930's. Sixty votes in the 100-member Senate were needed to advance the bill.

The plan, proposed by the White House and supported by the Senate's Democratic majority, is designed to regulate banking practices that are blamed for the global economic crisis in 2008.

Senate Banking Committee Chairman Chris Dodd, a Democrat, has been negotiating with the panel's top Republican, Richard Shelby, on a bipartisan compromise. Shelby said the two sides are very close to a deal. And it is widely believed that despite Monday's setback a bill will eventually clear the Senate.

President Barack Obama said in a statement Monday that he was "deeply disappointed" Senate Republicans voted against allowing public debate on Wall Street reform to begin.

He said the legislation would provide the consumer protection and accountability needed to prevent another financial crisis and urged the Senate to "put the interests of the country ahead of party."

Republicans oppose the bill's creation of a new consumer protection agency. They have also criticized an element designed to end tax-payer bailouts of "too big to fail" firms.

The legislation would regulate complex financial transactions known as derivatives, a market open to the dangerous speculation that helped ignite the financial crisis.

Senate Minority Leader Mitch McConnell, in advance of Monday's vote, said Republicans are not going to be "rushed" into passing another massive bill.

The House of Representatives passed its version of the legislation last year.

Some information for this report was provided by AP, AFP and Reuters.

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