Reuters: Top Senate Democrats Near Derivatives Deal

[flpoljunkie]

Top Senate Democrats near derivatives deal

Reuters
Sunday, April 25, 2010; 6:59 PM

WASHINGTON (Reuters) - The two Democratic Senators charged with writing rules for the $450 trillion private swaps market are near a deal, and will include a provision to require banks to spin off swaps desks, people familiar with the talks said on Sunday.

One source said the Treasury Department is raising concerns over the restrictions as Senate Banking Chairman Christopher Dodd and Senate Agriculture Chairman Blanche Lincoln try to hash out how best to clamp down on derivatives, blamed in part for accelerating the recent financial crisis.

The Senate votes on Monday on whether to start debating Democrats' bill to impose strict rules for banks, capital markets and derivatives.

(Reporting by Roberta Rampton, Rachelle Younglai, Kevin Drawbaugh and Charles Abbott; Editing by Bernard Orr)

http://www.washingtonpost.com/wp-dyn/content/article/2010/04/25/AR2010042502874.html

[DCBob]

1. This deal will likely lock down at least one GOPer vote...

Snowe.

[DrToast]

2. Grassley already voted for Lincolns rule, I believe.

[DCBob]

3. I am talking about tomorrows vote..

Dems need at least one Repub to break fili.

[HughMoran]

4. No Deal yet on Financial Rules as Test Vote Looms

By JIM KUHNHENN Associated Press Writer
WASHINGTON April 25, 2010 (AP)


With no bipartisan deal on how to rein in Wall Street, Democrats stepped up their efforts Sunday to splinter unified Republican opposition to their sweeping regulatory overhaul.

In a move that could attract the support of at least two Republicans, Democratic Sen. Christopher Dodd, the chairman of the Senate Banking Committee, agreed to toughen his sweeping bill with rules on derivatives despite objections from the Obama administration, according to a Democratic official familiar with the negotiations.

Derivatives are the complex securities blamed for helping precipitate the 2008 Wall Street crisis.

The restrictions adopted by Dodd were written and approved by the Senate Agriculture Committee last week. They include a requirement that banks spin off their derivatives businesses into subsidiaries with separate sources of capital. Banks fiercely opposed the provision. The Obama administration has called for banks to end trading in speculative securities, but not to jettison operations that create derivatives markets for clients.

http://abcnews.go.com/Business/wireStory?id=10470335

[DCBob]

6. I think they will have a deal by tomorrow and the GOPers will cancel the filibuster..

Many hinted at it today on the Sunday talks shows. All the "tough" talk was always followed by "unless"... The GOPers know "just say no" does not play well politically with this issue.

[HughMoran]

10. I actually like the derivatives language they added to get a Republican vote or two

Who knew a compromise could actually strengthen the bill?

[DCBob]

11. Thats good to hear.. I also wish they would add something about regulating the rating bureaus..

IMO, they carry a big part of the blame for the financial meltdown. Billions in mortgage backed scurities that collapsed in value in 2008 were all rated "AAA".. the highest rating.

[BrentWil]

5. There should be no deal..

Just make them vote over and over again for Wall Street

[TomCADem]

7. The Good News Is That The Deal Is Closer To Lincoln's Derivative Language Than Dodd's

So, in a rare instance, the bill got tougher, rather than weaker on finacial derivatives. The big key is whether the bill keeps Lincoln's language requiring certain banks to divest themselves of certain types of derivatives work.

[niceypoo]

8. Lets hope this one has some teeth

...unlike the insurance reform bill.

[ShortnFiery]

9. Odds are that whatever is passed, it will favor LARGE banks over smaller ones and Credit Unions. eom