April 20, 2010 / 9:34 PM / 8 years ago

Lincoln's swaps bill finding support ahead of vote

* Lincoln optimistic regulatory reform bill will pass

* Chambliss says he has “issues with her bill”

* Agriculture draft to be included in larger Senate bill

By Christopher Doering and Charles Abbott

WASHINGTON, April 20 (Reuters) - A sweeping regulatory reform bill introduced by Senator Blanche Lincoln received solid backing from fellow Democrats on Tuesday despite intense opposition from a top Republican, one day before the measure faces a vote by the Senate Agriculture Committee.

The bill, which Lincoln and other regulatory overhaul supporters tout as the strongest reform package to date, would toughen oversight of the $450 trillion over-the-counter derivatives market by requiring most swaps to trade on regulated exchanges and pass through clearinghouses.

It also would require banks to spin off swaps desks if they want the protection of federal deposit insurance or access to Federal Reserve discount window and it would exempt some commercial end users from mandatory swap clearing.

The Agriculture Committee, chaired by Lincoln, has 12 Democrats and nine Republicans.

Lincoln, who spent much of Tuesday joining other Democrats drumming up support on Capitol Hill, said she was confident the legislation would pass her committee despite objections by its top Republican, Saxby Chambliss.

“We didn’t set it up to fail,” Lincoln told reporters when asked if she had enough votes for approval.

If it does pass the Senate Agriculture Committee, the measure will be included in a broader regulatory reform plan from Christopher Dodd, the Democratic chairman of the Senate Banking Committee.

Republicans strongly oppose several provisions in Lincoln’s bill, including the spin off of swap desks. They say the end user exemption is too narrow.

“Any number of provisions like that are pretty objectionable,” said Chambliss with a laugh. “There are a lot of issues with her bill.”

Chambliss said he was optimistic Democratic amendments or changes by Lincoln herself would transform the bill into something they could support.

But a Democratic staffer said that Lincoln was unlikely to make any major changes before the mark-up.

Efforts to overhaul the tattered regulatory fabric have gained momentum in recent weeks amid concerns over a financial crisis in Greece and a fraud charge against Goldman Sachs Group Inc (GS.N).

“As each week goes by ... the wind is at our back. What you don’t regulate will burn you ... the American taxpayer,” said Michael Greenberger, a law professor at the University of Maryland and a former official at the Commodity Futures Trading Commission.

The Senate is expected to debate on a broad financial reform package next week. Democrats are seeking at least one Republican vote to overcome procedural blocks to the financial reform bill and are trying to build on widespread anti-bank sentiment ahead of the November mid-term elections.

Republicans are trying to protect Wall Street “by doing one thing: saying ‘no’ and stopping reform and stopping this legislation at all costs,” said Senator Robert Casey. “The American people are watching carefully about whose side you’re on,” the Democrat warned.

Editing by Lisa Shumaker

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below