Dodd abandons derivatives amendment in financial regulation bill
Sen. Christopher J. Dodd (D-Conn.) has decided to abandon a proposal aimed at fostering compromise over a controversial provision in the far-reaching financial regulatory overhaul bill before the Senate.
An amendment Dodd proposed Tuesday would have altered a measure currently in the legislation dealing with oversight of the vast market in financial derivatives. A provision in that section, advocated by Sen. Blanche Lincoln (D-Ark.), chairman of the Senate agriculture committee, could force some of the nation's largest banks to spin off their lucrative derivatives operations.
The provision has encountered stiff opposition from banks worried about their bottom lines. But it also has been criticized by numerous regulators, Obama officials and fellow lawmakers, who see the measure as unwieldy and possibly harmful to U.S. competitiveness in financial markets.
Dodd's proposed amendment would have preserved Lincoln's tough language in the bill, but it would have postponed any action for two years so the ban could be studied. It also would have assigned the study to a new council of regulators, headed by Treasury Secretary Timothy F. Geithner, whose members have serious reservations about such a dramatic measure and might very well kill it in the end.
Dodd spokeswoman Kirstin Brost said Tuesday that he will not move to bring up the amendment on the Senate floor.
-- Brady Dennis