The US Senate has approved a sweeping Wall Street reform bill, ending months of political wrangling over the biggest overhaul of financial regulation since the 1930s.
The bill was passed by 59 votes to 39 and creates new ways to watch for financial risks and makes it easier to liquidate large failing firms.
The legislation must still be merged with the House of Representatives' version into a compromise measure before the final package can go to US President Barack Obama to sign into law.
Changes proposed in both bills threaten to constrain the banking industry and reduce its profits for years to come.
Mr Obama said the final version of the bill will hold financial firms accountable but not stifle the free market.
He said: 'Over the last year, the financial industry has repeatedly tried to end this reform with hordes of lobbyists and millions of dollars in ads, and when they couldn't kill it they tried to water it down. Today, I think it's fair to say these efforts have failed.
'We've still got some work to do. The House and the Senate will have to iron out the differences between the two bills. And there's no doubt that during that time the financial industry and their lobbyists will keep on fighting.'
Fears about the effectiveness of the eurozone's efforts to tackle its debt crisis are continuing to have an impact in the US.
In New York last night, the Dow Jones dropped 3.6%, a fall which was also prompted by the publication of poorer than expected US employment figures.
