US close to Wall Street reform bill

WASHINGTON could pass a bill to crack down on Wall Street within days as the US securities watchdog’s case against Goldman Sachs adds impetus to the case for financial reform.

Senators said Democrat and Republican agreement on a sweeping overhaul of the financial system was “very, very close”. After months of arguing vehemently against new banking legislation, Republicans tacitly admit the Securities and Exchange Commission’s fraud case against Goldman has turned the tide.

Chris Dodd, Democratic chairman of the Senate banking committee, said: “We are going to get this bill, I think in the next few days, maybe even by [today], and it’s going to be a major achievement for this country.”

Senior Republican Richard Shelby added: “We are getting there, I think conceptually we are very, very close.”

The 1,300-page reform bill will see derivatives forced onto exchanges to make trading more transparent. It would also severely hit banks’ proprietary trading abilities and require hedge funds to register with the SEC.

Republican objections have centred on the proposal of a $50bn (£32.5bn) rescue fund. Even though it would be paid for by the banks themselves, critics say it would establish a “permanent bailout” of Wall Street.

The Senate’s 59 Democrats need the vote of just one Republican to pass the bill. A public Senate debate begins later today.