President Barack Obama has signed legislation to reform the business practices of U.S. financial institutions. Passing the bill was one of the administration's major priorities.
President Obama says the new regulations on major financial firms will protect consumers and prevent the abuses that many analysts say led to the global economic recession.
"Reform will also rein in the abuse and excess that nearly brought down our financial system," said President Obama. "It will finally bring transparency to the kinds of complex and risky transactions that helped trigger the financial crisis."
The new laws are the broadest reform of the U.S. financial industry since the Great Depression of 1930s. Before he signed it, the president said the overhaul will have global implications.
"That is why we all stand to gain from these reforms," said Mr. Obama. "We all win when investors around the world have confidence in our markets."
The law will allow the government to take over failing financial institutions, if they are so big that their collapse would damage the U.S. economy. The government would then sell the properties to ensure that taxpayers do not bear the cost of the failure.
Banks will be required to keep more money on hand to cover potential losses from bad investments. And complex transactions called derivatives will be more tightly regulated.
Opposition Republicans in Congress are criticizing the overhaul as unnecessary government intrusion into private business.
High-ranking Republican Representative Mike Pence says the reform amounts to a "permanent bailout of Wall Street" and he called for its repeal.
The top Senate Republican, Minority Leader Mitch McConnell, says it will make America's unemployment problem worse.
"Job-stifling taxes, regulations, government intrusion - these appear to be the three pillars of every Democratic legislative effort," said Mitch McConnell. "They are also the three things lawmakers can do that are guaranteed to kill more jobs."
President Obama thanked the few Republicans who joined his fellow Democrats to vote for the bill. He called those who did not, "a partisan minority determined to block change."
Many of the biggest banks that were bailed out during the financial crisis have repaid their loans and are reporting profits.
Peter Cardillo, chief market economist with the New York-based financial firm Avalon Partners, says the reforms might cut into those profits, at least initially.
"In certain cases, probably it will change the way Wall Street does business," said Peter Cardillo. "And that means, perhaps, giving up some business. And that means lower earnings for some of the major [financial] houses on Wall Street."
Mr. Obama signed the bill in Washington's Ronald Reagan building, named for a president who championed business deregulation.
