Ezra Klein: Blanche Lincoln To Get Tough On Derivatives?

Blanche Lincoln to get tough on derivatives?

Contrary to most everyone's expectations, Blanche Lincoln appears to be developing, well, a really strong set of regulations on derivatives.

According to Politico, she dropped her efforts to cooperate with Sen. Saxby Chambliss (R-Ga.) after he balked at putting standardized derivatives on exchanges. The language she's preparing is now stronger than what appeared in the House bill, the Dodd bill or even the administration's own proposal. Her proposal will regulate foreign currency swaps, which the Treasury Department has opposed, bar "major swaps dealers" from receiving federal financial assistance in the event of a meltdown, and open derivatives dealers to fraud prosecution if they knew their deal could defraud the public.

“Proposals that I have seen from the administration have not gone far enough to prevent bailouts of ‘too big to fail institutions’ and could contain loopholes," Lincoln said. "If we pass reform, it needs to be real reform. My proposal will go further than any other congressional or administration proposal to prevent future bailouts.”

Final judgment will have to wait until we see the actual language, of course. But this is very encouraging, and very unexpected.

By Ezra Klein |
April 13, 2010

http://voices.washingtonpost.com/ezra-klein/2010/04/blanche_lincoln_to_get_tough_o.html

Lincoln Takes Populist Turn On Wall Street Reform
Brian Beutler
April 13, 2010, 6:53PM

Sen. Blanche Lincoln (D-AR) surprised many observers today when she announced she'd introduce legislation to tightly regulate the derivatives market, as part of a broader financial regulatory reform bill. Lincoln's one of the most conservative Democrats in the Senate, and the White House had been pressuring her not to cede too much to the GOP on the issue. In the end she not only did as they asked, she took them to task for not going far enough to regulate banks.

"Proposals that I have seen from the administration have not gone far enough to prevent bailouts of 'too big to fail institutions' and could contain loopholes," Lincoln said. "If we pass reform, it needs to be real reform. My proposal will go further than any other congressional or administration proposal to prevent future bailouts."

And, faced with a primary challenge, and a tough general election campaign, she wasted no time positioning herself as a bold opponent of Wall Street. Just hours after the news broke, her campaign manager Steve Patterson blasted out an email to supporters. "Just this afternoon, news broke about Senator Lincoln's new proposal that would drastically change the way Wall Street does business," Patterson writes.

http://tpmdc.talkingpointsmemo.com/2010/04/lincoln-takes-populist-turn-on-wall-street-reform.php?ref=fpblg