) -- House and Senate negotiators completed early Friday an overhaul of banking regulations.
Lawmakers hope to send the legislation, a priority of President Obama, to the president's desk by July 4.
reports the legislation sets up a warning system for financial risks and creates a consumer financial protection bureau to police lending. It forces large failing firms to liquidate and sets new rules for financial instruments that have been largely unregulated.
A vote on the final bill from the House and Senate is expected next week.
According to the
, lawmakers will force banks to
spin off their swaps desks
but have made significant concessions to Wall Street.
The members of Congress also voted to impose a tough proprietary trading ban on deposit-taking banks, new conflict of interest rules and a surprise $19 billion levy on the industry.
But, the newspaper reports, a ban on banks investing in hedge funds was relaxed to allow them to invest up to 3% of their tier one capital. An earlier proposal allowed 2% of tangible common equity -- a difference worth billions to the biggest banks.
-- Written by Joseph Woelfel in New York.
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