The U.S. Senate approved a sweeping Wall Street reform bill on Thursday night, capping months of wrangling over the biggest overhaul of financial regulation since the 1930s, Reuters reported.

By a vote of 59-39, the Senate awarded a victory to President Barack Obama, a champion of tighter rules for banks and capital markets following the financial crisis that slammed the economy and led to massive taxpayer bailouts.

The Senate bill must now be merged with a measure approved in December by the House of Representatives. Only then can a final piece of legislation go to Obama to be signed into law, something that analysts said might happen next month.

Changes proposed in both bills — driven by lawmakers eager to look tough on Wall Street before congressional elections in November — threaten to constrain the banking industry and reduce its profits for years to come.

In the Senate vote, four Republicans sided with the Democrats for approval: Susan Collins, Olympia Snowe, Iowa’s Charles Grassley and Scott Brown. Two Democrats voted against the bill: Maria Cantwell and Russ Feingold.

Flashpoints in the House-Senate negotiations will likely include a controversial proposal to curb bank credit-swap trading.

Obama said the final version of the bill would hold financial firms accountable but not stifle the free market.

“Over the last year, the financial industry has repeatedly tried to end this reform with hordes of lobbyists and millions of dollars in ads, and when they couldn’t kill it they tried to water it down. … Today, I think it’s fair to say these efforts have failed,” Obama said.

“We’ve still got some work to do,” he added. “The House and the Senate will have to iron out the differences between the two bills. And there’s no doubt that during that time the financial industry and their lobbyists will keep on fighting.”

On Wall Street on Thursday, the Dow Jones industrial average slid 3.6 percent, hurt by fears of Europe’s debt crisis retarding global economic recovery, but also by uncertainty over U.S. financial reform, traders said.

Barney Frank, head of a key House panel, told CNBC it was important to complete reform soon to ease uncertainty.