By Heather Grossmann
DNAinfo News Editor
MANHATTAN — The U.S. Senate passed a Wall Street reform bill Thursday, the largest since the Great Depression, aimed at curbing risk in the nation's banking and financial sectors and at protecting consumers.
The bill, which seeks to prevent a repeat of the financial meltdown that led to the recent recession, passed 59-39, with four Republicans joining the Democratic majority. Now, the bill will need to be reconciled with similar legislation that passed the House back in December. The process is expected to take weeks.
“The recession we’re emerging from was primarily caused by a lack of responsibility and accountability from Wall Street to Washington,” President Barack Obama said, the New York Times reported. “That’s why I made passage of Wall Street reform one of my top priorities as president, so that a crisis like this does not happen again.”
The Dow dropped 376 points Thursday, as news of the reform bill's passing spread and Wall Street grappled with bad national job numbers and a growing European debt crisis.
“There is no sector that is being spared,” head equity trader at BNY ConvergEx Group Anthony Conroy told the New York Times. “We are having a flight to liquidity. Everybody is trying to get liquid. Gold, oil, silver, financials — every sector is getting hit.”
The bill would strengthen government oversight of Wall Street by requiring hedge funds and other private equity companies to be regulated by the Securities and Exchange Commission, the Times reported.
Also, it would tighten up mortgage lending guidelines to restrict abusive lending and ensure that failing companies could be "liquidated at no cost to taxpayers," the paper said. It would empower regulators to seize companies, split them up and sell them off.
The White House indicated it would have a strong presence in shaping the final bill, the Times reported. Financial reform has been a key goal of the Obama administration since health care reform was passed.
President Obama touted the importance of the bill last month during a speech at Cooper Union.
“Some on Wall Street forgot that behind every dollar traded or leveraged, there is family looking to buy a house, pay for an education, open a business, or save for retirement," he said then. "There is no dividing line between Wall Street and Main Street. We will rise or we will fall together."
