The Senate financial overhaul package, which passed the Senate in a 59-39 vote on Thursday evening,would constitute the biggest overhaul of U.S. financial regulations since the 1930s. The legislation, broadly, is designed to close the regulatory gaps and end the speculative trading practices that contributed to the 2008 financial market crisis. Major components of the bill would:

- NEW REGULATORY AUTHORITY: Gives federal regulators new authority to seize and break up large troubled financial firms without taxpayers bailouts in cases where the firm's collapse could destabilize the financial system. Sets up a liquidation procedure run by the FDIC. Management could be removed, with shareholders and unsecured creditors bearing losses. Other provisions would make it harder for top executives at the failed firms to claim large compensation packages, and it would give the government power to limit payments for certain creditors of failed firms. Treasury would supply funds to cover the up-front costs of winding down the failed firm.

-CONSUMER AGENCY: Would create a new Consumer Financial Protection Bureau within the Federal Reserve, with rulemaking and some enforcement power over banks and non-banks that offer consumer financial products or services such as credit cards, mortgages and other loans. The new watchdog would have authority to examine and enforce regulations for all mortgage-related businesses, large non-bank financial companies such as big payday lenders and consumer reporting companies, and for banks and credit unions with assets of more than $10 billion.

-DERIVATIVES: Would require the vast majority of all derivatives trading be executed on a public exchange as opposed to between banks and their customers as many contracts are currently.. Most controversially, the bill would adopt language written by Sen. Blanche Lincoln (D., Ark.), that would compel any large commercial banks that have access to the Federal Reserves discount window to spin off their derivatives trading business. The Fed, FDIC, Treasury as well as the banking industry have argued against this measure.

-FINANCIAL STABILITY COUNCIL: Would establish a new, nine-member Financial Stability Oversight Council, comprising existing regulators charged with monitoring and addressing system-wide risks to the nation's financial stability. Among its duties, the council would recommend to the Fed stricter capital, leverage and other rules for large, complex financial firms that are judged to threaten the financial system. In extreme cases, would have the power to break up financial firms.