QUELLE SURPRISE !!!: Blanche Lincoln wins runoff, now softens her tough derivatives stance

Lincoln Considers Compromise on Swaps-Desk Provision (Update3)
By Phil Mattingly


June 14 (Bloomberg) -- Senator Blanche Lincoln may modify her proposed rules on derivatives by giving commercial banks two years to push out their swaps trading desks into subsidiaries.

The compromise proposal also would allow the Federal Reserve to provide system-wide emergency assistance to swaps dealers, according to a draft obtained by Bloomberg News and confirmed by Lincoln’s office today.

The changes are aimed at clarifying questions about the original language and don’t pull back from the purpose of the measure, which is to separate commercial banking from derivatives trading, Courtney Rowe, a spokeswoman for the Arkansas Democrat, said today in an e-mailed statement.

The plan “is a strong provision that will protect depositors and get banks back to the business of banking,” Rowe said. “These clarifications will clear up any questions that exist about the intent of the provision without compromising the legislation.”

The revised language would give federal banking regulators two years to determine the impact of the measure on mortgage lending, small business lending, jobs and capital formation. The proposal doesn’t provide for any action after the study. ........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=ard3u7C1Y3lU&pos=6

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