Republicans halt Obama's financial reforms

New legislation designed to place tougher controls on Wall Street suffered a temporary setback on Monday, when President Barack Obama's Republican opponents in the US Senate voted down the proposal to adopt the bill. Lawmakers voted 57-41 to open debate, falling short of the 60 approvals needed to move ahead with the regulatory overhaul.

Reuters

Obama described himself as "deeply disappointed" by the result.

"Some of these senators may believe that this obstruction is a good political strategy, and others may see delay as an opportunity to take this debate behind closed doors, where financial industry lobbyists can water down reform or kill it altogether," said Obama.

But Senate Minority Leader Mitch McConnell denied that his party was siding with bankers, saying that Republicans want to "tighten the screws on Wall Street" but don't want "to be rushed" into the legislation.

The bill maps out a way to dissolve the "too big to fail" firms to avoid taxpayer-funded bailouts like those performed in late 2008. It would also establish a new agency to protect consumers from suspect lending practices, as well as tightening regulations on the market in derivatives.

The vote came as a senate committee prepared to question Goldman Sachs executives on Tuesday about the investment company's controversial actions preceding the global financial crisis.

Amid anger at banks blamed for the financial crisis, a new Washington Post/ABC poll found the US public backs tougher rules for Wall Street by a 65-31 per cent margin.