Subscribe to the Finance Headline RSS feed | Subscribe to the Finance Headline feed via EmailFDIC Chair Bair Urges Changes to Derivatives Language as Senate Moves to Debate, Amend Dodd Bill
May 4, 2010 in Banking Report · Leave a Comment
Federal Deposit Insurance Corporation Chairman Sheila Bair May 3 urged the Senate to remove language from financial regulatory reform legislation (S. 3217) that would force banks and bank holding companies to spin off their derivatives business to hedge funds and other non-bank entities.
Bair’s call for the change came on the eve of the Senate’s expected kick-off of debate and amendment of the Restoring American Financial Stability Act, introduced by Senate Banking Chairman Christopher Dodd (D-Conn.).
Language on derivatives has been critical for banks. Provisions authored by Senate Agriculture Committee Chairman Blanche Lincoln (D-Ark.) would prevent banks that trade credit default swaps from having access to FDIC deposit insurance and other federal assistance, such as the Federal Reserve’s discount window and credit facilities, effectively forcing banks to sell those businesses.
