(Adds detail, background, Lincoln comment)
WASHINGTON, May 18 (Reuters) - U.S. regulators would be able to kill a controversial provision of the Senate’s financial-reform bill under a compromise offered by Democratic Senator Christopher Dodd on Tuesday.
Dodd’s proposal would delay implementation of an element of the bill for two years that requires banks to separate their lucrative swap-trading desks from core operations. If regulators determine that it would harm the economy they would have the power to prevent it from taking effect entirely.
The proposed rule, written by Senate Agriculture Chair Blanche Lincoln, is opposed by the Obama administration and major Wall Street banks.
Dodd offered the compromise as the Senate sought to tie up loose ends on the bill before a final series of votes.
Lincoln was not in the Senate on Tuesday as she tried to fend off a primary challenge from a left-leaning opponent in her home state of Arkansas.
“I remain fully committed to my provision and will fight efforts to weaken it,” Lincoln said in a statement. (Reporting by Kevin Drawbaugh, Andy Sullivan and Charles Abbott; Editing by Leslie Adler)
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