Obama hails new deal to overhaul Wall Street

US PRESIDENT Barack Obama declared victory yesterday after congressional negotiators worked all night before agreeing to a sweeping overhaul of the way Wall Street does business.

Lawmakers shook hands on the compromise legislation at 5:39am after Obama administration officials helped broker a deal that cracked the last impediment to the bill, a proposal to force banks to spin off their lucrative derivatives trading business.

The agreement now must go to the full Senate and House of Representatives for final votes and was expected to be on Obama's desk for signing before America's 4 July holiday.

Speaking as he left the White House to attend the G20 economic summit of world leaders in Canada, the president said he was gratified for Congress' work and said the deal included 90 per cent of what he had proposed.

He said the bill, forged in the aftermath of the 2008 meltdown, represents the toughest financial overhaul since the Great Depression of the 1930s.

Obama said: "We've all seen what happens when there is inadequate oversight and insufficient transparency on Wall Street.

"The reforms working their way through Congress will hold Wall Street accountable so we can help prevent another financial crisis like the one that we're still recovering from."

The legislation touches on an exhaustive range of financial transactions, from a debit card swipe at a supermarket to the most complex securities deals cut on Wall Street.

The bill would set up a warning system for financial risks, would create a powerful consumer financial protection bureau to police lending, would force large failing firms to liquidate and would set new rules for financial instruments that have been largely unregulated until now.

Obama said he will discuss the proposed regulations with other leaders at the G20 meeting in Toronto this weekend.