Lawmakers took a major step toward overhauling the nation’s financial system Wednesday as a House panel prepared to pass legislation.

The House Financial Services Committee is slated to vote Thursday morning on a measure reining in the multitrillion-dollar market for complicated financial derivatives that many blame for exacerbating the crisis last year...

The House committee sped through debate on the derivatives bill on Wednesday, but is now turning to the more contentious issue of creating a new federal Consumer Financial Protection Agency (CFPA). Both are central elements of President Barack Obama’s efforts to revamp the regulatory system and have been the source of major lobbying battles.

The proposal for a new consumer agency has come under attack from a wide range of industries and business groups, including the U.S. Chamber of Commerce. Financial Services Committee Chairman Barney Frank (D-Mass.) indicated he expects this to be a tougher battle...

A pair of maverick Bear Stearns hedge fund managers lied to clients "over and over again" to protect their multimillion dollar pay cheques, exchanging secret emails to orchestrate a $1.6bn fraud as their funds imploded in the global financial crisis, a US jury heard yesterday.

At a federal court in the New York borough of Brooklyn, financiers Ralph Cioffi and Matthew Tannin became the first Wall Street bankers to stand trial in a criminal case arising from the credit crunch. The men, who protest their innocence, are accused of hiding the true picture from clients as their two high-flying hedge funds fell to earth - an event which ultimately contributed to the collapse of the 85-year-old brokerage Bear Stearns...

If you want to know who actually runs this country, just look at the phone logs, released by court order last week, revealing Geithner’s nearly constant calls to solicit the advice of the fat cats who caused the banking implosion. It’s the same as when he was chair of the Federal Reserve in New York, before Obama appointed him to his current job. Only back then, as he blithely ignored the impending financial meltdown, it was easier to have lunch with the bankers as well as to chat by phone.

In an earlier Freedom of Information exposé, The New York Times reported in April: “An examination of Mr. Geithner’s five years as president of the New York Fed, an era of unbridled and ultimately disastrous risk-taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Street’s giant financial institutions. His actions, as a regulator and later a bailout king, often aligned with the industry’s interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records.”