House Backs Financial Regulatory Reform

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The House of Representatives yesterday gave its final approval to a bill increasing regulation of the U.S. financial industry.   The bill was widely described as the most comprehensive reorganization of financial regulation since the Great Depression, passed by a vote of 237 to 192, with all but three Republicans in opposition.    The legislation now moves to the Senate, where a vote is expected later this month.  The bill is not expected to be signed by the President at least until the middle of July.

The 2,300-page bill includes strict new rules for banks, such as ban on proprietary trading and a consumer financial protection agency.   However, it is not as harsh on hedge funds, allowing banks to invest up to 3% of their capital in alternative investment funds.   The bill also includes a simplified version of the Volcker rule, which was designed to keep banks from putting too much of their money in hedge funds and private equity funds.

Anna Timone (195 Posts)

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