US Senate Bill to break up Wall St banks blocked

A plan to break up the big Wall Street banks — most of which have large London operations — failed to get through the US senate today as both Republicans and Democrats voted against it.

The Bill's defeat came at 2am UK time with 61 voting against and only 33 for. Wall Street had lobbied hard against the plan to limit the size of Bank of America — owner of Merrill Lynch — JPMorgan Chase, Citigroup, Goldman Sachs, Wells Fargo and Morgan Stanley.

The proposal was to ban banks from holding assets of more than 2% of US GDP and more than a 10% share of the nation's deposits. "When a few megabanks dominate our financial system, the downfall of any of them can mark the downfall of our entire economy," the Bill's author, Democrat senator Sherrod Brown, said. However, his plan is now dead.

President Obama has argued that size alone was not the root of the 2008 financial crisis. All eyes will now be on the senate Bill of senator Chris Dodd, which does not impose size limits but would require big financial firms to be broken up if a council of regulators deemed them too great a potential threat to the economy.

It has to be passed by the senate and then combined with Obama's House of Representatives Bill from last year.