The US Senate has passed a bill allowing the most significant reforms to the country's financial regulations since the Great Depression.

The vote passed through the Senate by 59 votes to 39.

The bill must now be merged with a version passed by the House of Representatives before it will be signed into law by the president.

Changes to the system have been hailed by Mr Obama as a necessity to prevent another financial crisis on Wall Street. Speaking after the result of the vote was announced, Mr Obama said: "Because of financial reform, the American people will never again be asked to foot the bill for Wall Street's mistakes.

"There will be no more taxpayer-funded bailouts - period. If a large financial institution should ever fail, we will have the tools to wind it down without endangering the broader economy."

One of the biggest changes will be that banks will be forced to keep their derivatives dealing operations separate from their core operation, or divest them altogether. There will also be the creation of a new financial watchdog, restraints on the larger banks and giving the Federal Reserve powers to take control of risky larger firms.

The bill was slowed by some Republican leaders, and a minority of Democrats, who blocked the bill from going through.

A House negotiator said he expected the legislation would reach Mr Obama's desk to be signed into legislation before July 4th.

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