The US House of Representatives has passed legislation aimed at gutting the Dodd-Frank act. The Financial Creating Hope and Opportunity for Investors, Consumers and Entrpreneurs Act aims to curb the amount of regulation banks dealing in derivatives will face and cut back stress testing.
However, the controversial measure to reverse Dodd-Frank, on which many banks have already invested large sums in new infrastructure, is unlikely to pass the Senate.
Dodd-Frank was introduced in the wake of the financial crisis in 2008 in order to get a grip on risky derivatives products such as residential mortgage-backed securities, which were blamed for the near collapse of the global banking system.
Paul Ryan, speaker in the House, said: "This is a jobs bill for Main Street. It will rein in the overreach of Dodd-Frank that has allowed the big banks to get bigger while small businesses have been unable to get the loans they need to succeed."
Democrats have been highly critical of the move, along with some Republicans.
The bill is the second passed by the House of Representatives that is unlikely to become actual law. Democrat critics said it would "pave the way" for economic damage on the scale of the financial crisis or worse.
While some representatives agree Dodd-Frank is too complex and places too high a burden on some firms, many think the new legislation goes too far in the other direction and will create new risks in the financial system.