The Senate voted 93-5 today to adopt provisions of the Wall Street reform bill that were crafted by Senator Warner, in partnership with his Banking Committee colleague Senator Bob Corker (R-TN), for the orderly liquidation of financial firms deemed “too big to fail.” The proposal also will prevent any future taxpayer-funded bailouts of large, interconnected firms that get into financial trouble.

The amendment adopted today dropped a previous provision for a $50 billion fund to help pay for liquidation costs, collected from the financial industry. Instead, any costs incurred as the government winds down a firm would be recovered from the industry after the fact.

It also tightens restrictions on the Federal Reserve's emergency lending powers, providing authority to the Federal Deposit Insurance Corporation to use a credit line from the U.S. Department of Treasury to cover any costs of unwinding a failing firm. Any losses incurred by the FDIC would be recovered as the agency sells off the assets of the failed firm. Finally, regulators would be able to ban “culpable” management and directors of failed firms from working in the financial sector.

Prior to the vote, Senator Warner spoke on the Senate floor:

We need to check our "D" and "R" hats at the door and find a way to figure out some new financial rules so we never have to face what we faced in 2008. ... I think the heart and soul of our challenge -- which was to end too big to fail and make sure taxpayers weren't exposed -- has been accomplished. ...

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Earlier, Banking Committee Chairman Chris Dodd praised the strong, bipartisan working relationship betweenSenators Warner and Corker:

“Last November, I tasked Senator Mark Warner of Virginia and Senator Bob Corker of Tennessee with producing an agreement on how to resolve failed companies.”

“They did a tremendous job. I want to commend both of our colleagues, they worked very hard to draft language that is part of the underlying bill. The package they produced would create effective oversight for large firms and make these firms pay for the risks they pose to our country and to the economy. Their agreement put a mechanism in place to guarantee that when large firms fail, they fail. The management is fired, creditors and share holders take losses, the company is liquidated, and taxpayers aren’t on the hook.”