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.
