–House Financial Services Chief Says Conference Makes Progress
–Rep. Frank Confirms That Panel Will Focus On Derivatives Thursday

By John Shaw

WASHINGTON (MNI) – House Financial Services Committee Chairman
Barney Frank said Tuesday that the House-Senate conference panel on
financial regulatory reform continues to lumber through a host of issues
and is poised to complete its package by the end of the week.

Speaking during the deliberations, Frank said the House-Senate
conference panel is “on schedule to finish the conference” this week.

The conference panel Tuesday has been considering ideas to create a
consumer financial protection agency within the Federal Reserve Board.

Frank confirmed that the House-Senate panel will focus its
deliberations Thursday on regulating over-the-counter derivatives.

This issue, widely seen as the most controversial and contentious,
has been scheduled as the final major issue to be resolved.

Senate Agriculture Committee Chairman Blanche Lincoln continues to
push a plan that would force banks to spin off their derivatives units
or risk losing access to the Fed’s discount window and FDIC insurance.

The provision which requires a bank which qualifies as a swap
dealer to “push out” its swap desk to an affiliate of the bank holding
company has attracted strong opposition from major banks.

Several Democrats have said that a provision preventing banks from
buying and selling securities solely for the firm’s profit–proprietary
trading– would be a more effective tool to control risk than preventing
banks from trading derivatives.

The House passed its regulatory reform bill in December of 2009
while the Senate approved its bill several weeks ago.

Both Frank and Senate Banking Committee Chairman Chris Dodd have
they would like a final bill to be approved by Congress and sent to
President Obama by July 4th.

If a final package is agreed to this week, the final compromise
would be debated and voted upon by the House and Senate next week.

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

[TOPICS: M$U$$$,MFU$$$,MCU$$$]