Dodd and Derivatives: Swapping New York for London
Dave Mason /
Senate Democrats secretly agree that Sen. Blanche Lincoln’s (D-AR) proposal to attempt to impose a complete separating on credit default swaps and credit providers (i.e. banks) makes no sense. But they’re too embarrassed to say so while Lincoln uses the proposal to wage a populist campaign for re-nomination against liberal Arkansas Lt. Governor Bill Halter.
Now that Lincoln has been forced into a June 8 run-off against Halter, Lincoln’s Senate colleagues are looking for a quiet way to kill her swaps proposal. Banking Committee Chair Chris Dodd (D-CT) first proposed, and then backed off, a two-year delay in the effective date of the Lincoln proposal, suggesting that regulators, who uniformly oppose the idea, will kill it before then.
Based on Sen. Judd Gregg’s (R-NH) comments, Dodd may have dropped his amendment because sensibly-thinking Senators didn’t buy the delay scheme. And it is a good thing they didn’t. (more…)