Wall Street's largest banks are readying themselves for vast changes in how they do business after a Senate vote this week moved sweeping reforms one step closer.
Democrats in both houses of Congress have pledged to put a final version of the rules on President Barack Obama's desk within weeks, a signal to financial firms that they are running their last lap on a well-worn -- and immensely profitable -- track.
Baring major changes, Wall Street will soon be contending with a potentially powerful consumer protection agency and banks will be forced to wall off, or even sell off, some of their most profitable divisions.
According to analysts at Bank of America-Merrill Lynch, the reforms could lower the sector's profits by as much as 20 percent.
Banks have bristled at two proposals in particular: new "proprietary trading" rules that would bar deposit-holding institutions from making bets for their own gain, and rules that would force the trade of complex financial instruments called derivatives on open exchanges.
Curbs on "prop trading" went into effect after the Great Depression. In 1933, the Glass-Steagall Act prohibited commercial banks from underwriting corporate securities, or acting as brokerages, but it was undone in 1999.
"Potential restrictions on proprietary and derivatives trading are likely to have the most significant effect on the investment banks," said Matthew Albrecht of Standard and Poor's, a ratings agency. "(They) could cause a measurable decrease in revenues and earnings over the next few years."
Critics say the measures will make markets less efficient, and so push up the cost of borrowing for ordinary Americans.
"Requiring banks to push out their derivatives businesses and limiting their ability to hedge their own risk exposures... will ultimately hurt consumers through higher mortgage and credit costs," said Tim Ryan, head of the Securities Industry and Financial Markets Association.
Some critics say the measures could suck two trillion dollars in credit out of the economy.
With the stakes so high, Wall Street is not going down without a fight.
Defiant US business groups on Friday indicated the Senate vote would simply signal a new round in a long drawn-out political punch up.
"It is a missed opportunity to bring the right reforms to our financial system" said David Hirschmann of the US Chamber of Commerce said of the Senate vote, hinting that the powerful lobby group may take legal action.
"The chamber is always engaged in the battle of ideas, at the legislative phase, in the regulatory phase and -- if absolutely all else fails -- then in the litigation stage." Their weight is likely to be felt.
The Chamber of Commerce, while publicly supporting reform efforts, has spent three million dollars in lobbying to shape its outcome.
According to the Center for Public Integrity "some 850 banks, hedge funds, business groups, and other interests hired 3,000-plus lobbyists and spent at least 1.3 billion dollars to influence financial regulatory reform."