Giving In on Trading, Bankers Turn to Other Losses

[groovedaddy]

WASHINGTON — Bankers have all but given up on defeating one of the most contentious provisions in the financial regulation bill — one that would effectively bar federally insured banks from trading for their own accounts — and are now focusing on battles like heading off a prohibition on derivatives trading.

As House and Senate negotiators head into a final push to send the legislation to President Obama, they have largely agreed to stricter limits on so-called proprietary trading than those envisioned in the versions passed by either chamber.

That outcome would be a victory for the White House and for the provision’s most dogged advocate, Paul A. Volcker, the former Federal Reserve chairman.

But with the so-called Volcker Rule now likely to become law after appearing to be dead at earlier points in the legislative process, banks are battling hard to fend off further restrictions on their activities.

Much of the action centers on a provision sponsored by Senator Blanche Lincoln, Democrat of Arkansas, to effectively bar banks from trading derivatives, the complex instruments that have been implicated in the financial system chaos that followed the near collapse of the mortgage market in 2008.

http://www.nytimes.com/2010/06/15/business/15regulate.html?th&emc=th

[safeinOhio]

1. IF a banker or CEO, for that matter,

were given the moral dilemma, killing your mother to raise profits. Start writing the obit.

[necso]

2. It's essential

to do the maximum possible to avert a repeat of recent financial-sector problems -- and to draw attention to legislators (etc) who encumber, hinder or obstruct such legislation.