Radio New Zealand - Te Reo Irirangi o Aotearoa

US unveils new financial regulation bill

Updated at 7:15 am on 17 March 2010

Proposals to change the financial rules in the United States will now be fought out in America's political arena, but will have a big impact on Wall Street if passed.

The chairman of the Senate Banking Committee, Democrat Christopher Dodd unveiled a new version of his reform bill, though it does not currently have Republican support.

Under the proposed changes, the Federal Reserve would retain its oversight of big banks with assets of over $US50 billion and gain new powers to break up large firms that could threaten economic stability.

Smaller banks will be regulated for the first time.

A new financial consumer watchdog will be set up inside the Federal Reserve which will have the power to make and enforce rules at banks and other financial firms like insurers.

Daniel Alpert of investment bank, Westwood Capital says the changes could cost big banks billions of dollars.

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