–Senate Majority Leader Reid: Hopes For ‘Significant Majority’ For Bill
–Sen. Reid: Senate Will Complete Reg Bill ‘One Way or Another’ Next Wk
–Sen. Reid: Urges GOP To ‘Join With Us In Passing This Bill’
By John Shaw
WASHINGTON (MNI) – Senate Majority Leader Harry Reid said Tuesday
the Senate will intensify its consideration of financial regulatory
reform legislation this week, adding that he is determined the Senate
complete work on the bill next week.
“We have to finish it next week,” Reid said in a speech on the
Senate floor, adding the upper chamber will complete work on the bill
“one way or another” next week.
“This is a really good bill,” Reid said. “It’s a strong piece of
legislation,” he added.
Reid said the Senate will vote on its first amendment Tuesday,
repeating that it will be an amendment offered by Democratic senator
Barbara Boxer which states that “no taxpayer funds shall be used to
prevent the liquidation of any financial company.”
The Senate Majority Leader said he hopes Republicans will “join
with us to pass this legislation.” He added that he prefers the bill is
ultimately passed by the Senate by a “significant majority.”
“I hope this is the case,” Reid said.
Reid said that he is trying to arrange a procedure with the
Republican leadership so that amendments and the final bill only need to
secure 50 votes rather than the 60 votes needed to end a filibuster.
The Senate began debating last Thursday the bill that was largely
drafted by Senate Banking Committee Chairman Chris Dodd.
It establishes a new independent Consumer Protection Bureau at the
Federal Reserve Board, creates a process to liquidate failed financial
firms, sets up a council of regulators to oversee systemic risk in the
economy, establishes a regulatory structure for over-the-counter
derivatives, requires hedge funds that manage over $100 million to
register with the SEC and creates a new office within Treasury to
monitor the insurance industry.
Dodd’s bill has been merged with a package that was approved by the
Senate Agriculture Committee which requires OTC markets to adopt aspects
of the regulated markets such as mandatory clearing through derivatives
clearing organizations and trading on exchanges or exchange-like
facilities.
It has a narrow exemption for commercial “end users” who use
derivatives to hedge against economic contingencies such as fluctuations
in fuel prices, currency and interest rates.
The most controversial features of the package is a provision that
requires a bank that qualifies as a “swap dealer” or a “major swap
participant” to either divest its swap desk or forego access to federal
credit assistance such as the Federal Reserve Board’s discount window of
FDIC deposit insurance.
This provision is certain to be challenged on the Senate floor.
Republicans have said they favor more disclosure of derivative swaps and
are expected to offer amendments that strip the language that prohibits
depository institutions from trading derivatives.
Sen. Richard Shelby, the ranking Republican on the Banking panel,
has made it clear that Republicans will try to pass amendments related
to the newly proposed consumer protection entity.
Two Democratic senators, Sherrod Brown and Ted Kaufman, are pushing
an amendment that would ban any bank from holding 10% of the nation’s
total deposits.
Two other Democratic senators, Jeff Merkley and Carl Levin, will
offer an amendment to ban banks from proprietary trading.
If the Senate passes a financial regulatory reform bill, it must be
reconciled with a competing version that was approved by the House in
December.
** Market News International Washington Bureau: (202) 371-2121 **
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