–Senate Votes 60-38 to End Debate on Regulatory Reform
–Final Senate Votes on Regulatory Reform Bill Set For 2:00

By John Shaw

WASHINGTON (MNI) – The Senate voted Thursday to end the debate on
financial regulatory reform legislation, setting the stage for final
approval of the landmark legislation later in the day.

The Senate voted 60 to 38 to end the debate on the bill.

After the vote, Senate Banking Committee Chairman said the Senate
will hold two final votes to complete work on a regulatory reform at
2:00 p.m. Thursday.

First, the Senate will vote to waive a budget point of order, a
motion that will require 60 votes and is expected to pass.

Then comes the final Senate will vote to pass the bill, which
requires only 50 votes and is expected to pass easily.

Since the House passed the identical bill several weeks ago, when
the Senate approves the legislation it will go to President Obama for
his signature.

The legislation would create a council of regulators to monitor the
economy for systemic threats. It would institute new regulations on
hedge funds and over-the-counter derivatives and create a Bureau of
Consumer Financial Protection that will oversee mortgage, credit cards
and other credit products.

The bill provides for expanded audits of the Federal Reserve by the
Government Accountability Office. The GAO would conduct a one time audit
of all the Fed’s emergency loan programs that were created during the
financial crisis. It would also have the authority to audit future
emergency lending and other Fed transactions, with a two year delay in
releasing the results.

The bill includes a variation of the Volcker rule, banning banks
from proprietary trading and limiting them from investing in or
sponsoring hedge funds and private equity funds. It limits bank
investments in private equity or hedge funds to 3% of a fund’s capital.
Total investment in private equity and hedge funds can’t exceed 3% of a
company’s tangible common equity.

The legislation would push most OTC derivatives through third party
clearinghouses and onto exchanges or electronic trading systems. It
would force banks to push some of their swaps trading into subsidiaries.

** Market News International Washington Bureau: (202) 371-2121 **

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