THE EVENT: The Senate cleared the way for a final vote on legislation that would constitute the biggest overhaul of U.S. financial regulations since the 1930s, voting, 60-40, to end more than three weeks of debate on the sweeping measure. President Barack Obama called the action a "major step forward."
KEY POINTS IN DEBATE: Republican critics have generally opposed the bill as an excessive intrusion by government into the markets. They also said the legislation doesn't deal with the circumstances that led to the severe decline in housing prices.
SUMMARY OF BILL: The legislation, broadly, is designed to close the regulatory gaps and end the speculative trading practices that contributed to the 2008 financial market crisis. Among other things, the bill would create a regulatory system to manage the collapse of a failed financial institutions; create a new consumer protection agency; change the way mortgages and credit cards are regulated and how financial firms interact with regulators; and boost the government's ability to deal with systemwide failures.
MARKET REACTION: Bank stocks briefly pared some of their losses after the vote, but closed lower. Concerns about exposure to Europe's debt woes continued to weigh on bank shares and on the broader market, with the Dow Jones Industrial Average falling 376.36 points, or 3.6%, to close at 10068.01, off 10.15% from its 2010 closing high hit on April 26.
WHAT'S NEXT: Senate Democrats would need to clear a handful of procedural hurdles for a final vote to occur Thursday evening, but leadership was discussing the possibility, according to several congressional aides. If the Senate approves the bill, it will have to be reconciled with a version in the House of Representatives. The House passed its version of the bill last year and the two chambers have approached a number of issues, including how the government should fund the cost of winding down a large financial firm, in very different ways.
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