Senate Passes Historical Financial Overhaul Bill

September 15, 2010 by · Leave a Comment
Filed under: Bond Regulation, Financial Crisis, The Rating Agencies 

The biggest overhaul of U.S. financial regulations since the Great Depression was passed by the Senate in a 59-39 vote. The legislation addresses the regulatory gaps and speculative trading practices that are believed to have contributed to the 2008 financial market crisis.

One of the provisions in the bill establishes a new regulatory body for credit rating agencies. The self-regulatory organization will assign credit-rating agencies to provide initial credit ratings of financial packages. The measure is aimed at preventing institutions from shopping for the best rating.

The Senate bill must now be reconciled with the House version.  It is projected that these negotiations will be completed in the upcoming weeks and that the bill will be available for the President’s signature before the Fourth of July holiday.

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