The U.S. Senate passed landmark legislation on Thursday night to further regulate banks and Wall Street in what is considered the largest attempt to overhaul the U.S. financial system since the 1930s. The bill, which passed by a 59-39 vote, must now be merged with a House of Representatives version.

President Barack Obama says Wall Street lobbyists failed to prevent the financial reform bill from coming to a vote. (Charles Dharapak/Associated Press)

Earlier, U.S. President Barack Obama said financial industry lobbyists failed in their attempt to block the vote. Obama said there is more work ahead but he will ensure the final bill will be effective and responsive.

"Our goal is not to punish the banks but to protect the larger economy and the American people from the kind of upheavals that we've seen in the past few years," Obama said.

The bill is seen a major victory for Obama, coming two months after his health-care overhaul was signed into law.

The legislation is the most sweeping tightening of the rules for Wall Street since the Great Depression. It calls for new ways to watch for risks in the financial system and makes it easier to liquidate large, failing financial firms.

Aims to protect consumers

It also writes new rules for complex securities blamed for helping precipitate the economic crisis in 2008 and creates a new agency assigned to protect consumers from potentially dodgy financial products, including mortgages.

Only two Democrats voted against the bill. Four Republicans broke ranks with their party to support it.

Twice the Senate had to beat back efforts by Republicans to delay the bill before achieving final passage.

"The decisions we've made will have an impact on the lives of Americans for decades to come," said Alabama Republican Sen. Richard Shelby, who voted against the legislation.

"Judgment will not be rendered by self-congratulatory press releases, but rather by the marketplace. And the marketplace does not give credit for good intentions."

With files from The Associated Press