Banks warned that the effects of the bill were already being felt in shaken markets, FT said. They also warned against plans to force banks to spin off their swaps trading businesses as this will destabilise markets.
The legislation – the main response to the financial crisis – bans deposit-taking banks from proprietary trading, introduces a consumer financial protection bureau to police the sale of credit products and empowers the government to seize a failing systemically important firm.
Banks warned that the effects of the bill were already being felt in shaken markets, FT said. Some regulators agreed privately that market disruption was partly attributable to the machinations of the Senate.
Key points of the reform bill
But the biggest banks dodged a final blow on Thursday through a Republican procedural move that prevented a vote on an amendment introducing tough “conflict of interest” rules and toughening a ban on proprietary trading.
The amendment from Jeff Merkley, the Democratic senator from Oregon, and Carl Levin, the Democrat from Michigan, had been attached to a Republican amendment which the Republicans withdrew.
More ambiguity surrounds the future of a provision to force banks to spin off their swaps trading businesses. Banks, supported by the Federal Reserve and the Federal Deposit Insurance Corporation, warn it will destabilise markets.
It is possible that the provision is modified or removed in conference but both banks and moderate politicians caution that nothing is certain in an anti-Wall Street atmosphere where both parties are reluctant to do anything in public that is seen to benefit banks.
See full FT article here
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