Fed Chairman Ben Bernanke, who endured a tense Senate confirmation vote in January, said the overhaul looked like it would be effective in preventing or at least blunting the impact of future crises.
The agreement, which concludes negotiations started on Tuesday, is a win for credit rating agencies, which otherwise would have definitely seen the clearinghouse take effect.
But lawmakers agreed to allow investors to sue agencies that recklessly failed to review key information as they developed their ratings, creating additional legal risk.
Moody's stock rose 2.5 percent and S&P parent McGraw Hill rose 1.5 percent, building on Tuesday's strong gains.
Democrats have yet to resolve a number of contentious issues before they complete their work.
House negotiators agreed to give shareholders the ability to sue banks and other third parties that are not directly involved in securities fraud cases. Senators on the committee are likely to oppose that idea.
House Democrats also said they would press their Senate counterparts to accept a $150 billion fund to pay for liquidating financial firms that get into trouble and empower regulators to break up unstable large firms. The Senate's approach would cover liquidation costs by selling off the troubled firm's assets, or levying a fee on other financial firms if more funds are needed.
The committee is scheduled next week to tackle disputes about how to limit banks' risky trading activities, how to protect consumers and whether to limit fees on debit card transactions.
Banks are pressing to soften a proposal that would limit their ability to trade on their own accounts and invest in private equity and hedge funds. But their prospects appear to be dimming.
They also look likely to face limits on their lucrative swaps-trading operations as Democrats near consensus on a proposal that would require banks to spin off their operations to a separately capitalized affiliate.
(Additional reporting by Kim Dixon and Kevin Drawbaugh; Editing by Peter Cooney)
In a separate area, negotiators also directed regulators to find a way to reduce the conflicts of interest that critics say led credit-rating agencies like Moody's Corp and Standard & Poor's to issue the highest ratings on toxic securities ahead of the financial crisis.
"The Fed was set up to be an independent body to set monetary policy,Coach, and we've been trying to walk this line between how independent they should be in doing that and how transparent those activities should be," said Democratic Representative Mel Watt.
Goldman Sachs Group would lose the most under the new rules, followed by Morgan Stanley, J.P. Morgan Chase and Bank of America, according to a Citigroup analysis.
Lawmakers signed off on a one-time look at its emergency lending during the crisis, and ordered the Fed to disclose on an ongoing basis details on its discount window lending and open market operations, although with a three-year lag.
Despite widespread criticism on Capitol Hill the Fed is too close to the banks it regulates, the central bank looks set to emerge as the most powerful financial regulator under the broadest rewrite of financial rules since the 1930s.
The Fed had been lambasted for failing to stem the risky lending that fueled the U.S. housing bubble and for bailing out big financial firms after the bubble popped. It has acknowledged its oversight was too complacent before the 2007-2009 financial crisis that shook economies worldwide.
Democrats who hope to send a final financial reform bill to President Barack Obama to sign into law by early July said they did not want to compromise the Fed's political independence.
WASHINGTON (Reuters) – After suffering sustained criticism of its role in the financial crisis, the Federal Reserve emerged on Wednesday from an overhaul of financial regulations with its jealously guarded independence intact.
Members of the House-Senate panel also agreed to abandon a plan to make the head of the New York Federal Reserve Bank a political appointee, according to a document obtained by Reuters. Senators postponed a formal vote on the measure until Thursday.
The Securities and Exchange Commission would set up a government clearinghouse to prevent agencies from soliciting business from the credit issuers whose products they are supposed to assess impartially unless the agency determines a better way to resolve the conflict of interest.
The Fed did not escape entirely unscathed.
The reforms under consideration would crimp financial firms' profits and saddle them with tighter regulations. They would establish new consumer protections,Inflatable Obstacles, set up a process to dismantle troubled firms and likely limit a wide range of risky but profitable trading activities.
In a big victory for the central bank, lawmakers hammering out a final version of a Wall Street reform bill agreed to drop two provisions the Fed had warned would subject its economic decision-making to outside political influence.
FED NOT ENTIRELY UNSCATHED
Lawmakers seeking to resolve differences between financial reforms passed by the House of Representatives and the Senate dropped a provision that would have opened the Fed's interest-rate policy to congressional audits, opting instead to examine less sensitive areas.
Lawmakers also dropped a proposal that would have made the head of the New York Fed a presidential appointee. Instead, the president of that branch — the only one of the 12 regional Fed banks with a permanent voting seat on the central bank's policy-setting committee — will continue to be named by the bank's board, which includes private bankers.