–Senate Banking Chief: Final Senate Vote Could Slip Until Next Week
–Sen. Dodd: ‘Very Good’ Meeting With Bernanke on EU Aid To Greece
–EU Aid Package Was A ‘Wise Thing’
–Senate Majority Leader Reid Opposes Amend To Kill Fannie, Freddie

By John Shaw

WASHINGTON (MNI) – Senate Banking Committee Chairman Chris Dodd
said Tuesday that key senators are actively working on possible changes
to the derivatives language in the current financial regulatory reform
bill.

“There is a lot of talk going on,” about adjusting the current
derivatives language in the bill, Dodd told reporters after a Senate
Democratic party meeting.

Dodd declined to discuss what changes might be contemplated.

The underlying Senate regulatory reform bill, largely drafted by
Dodd, establishes a new independent Consumer Protection Bureau at the
Federal Reserve Board, creates a process to liquidate failed financial
firms, sets up a council of regulators to oversee systemic risk in the
economy, establishes a regulatory structure for over-the-counter
derivatives, requires hedge funds that manage over $100 million to
register with the SEC and creates a new office within Treasury to
monitor the insurance industry.

Dodd’s bill has been merged with a package that was developed by
the Senate Agriculture Committee which requires OTC markets to adopt
aspects of the regulated markets such as mandatory clearing through
derivatives clearing organizations and trading on exchanges or
exchange-like facilities.

It has a narrow exemption for commercial “end users” who use
derivatives to hedge against economic contingencies such as fluctuations
in fuel prices, currency and interest rates.

A number of senators are seeking to challenge the provision that
would force most derivative swaps out of banks.

Sen. Richard Shelby, the ranking Republican on the Banking panel,
has said that he wants to expand the “end users” provisions.

In other remarks, Dodd said he would like the Senate to pass the
financial regulatory reform bill this week, but said it could slip until
next week.

Senate Majority Leader Harry Reid, also speaking to reporters, said
he wants to finish the regulatory reform bill this week, but also hinted
it may slip until next week.

The Senate is now debating an amendment by Sen. John McCain to
abolish Fannie Mae and Freddie Mac in two years.

Dodd has said it would be “reckless” to pull the plug on Fannie and
Freddie without some kind of alternative housing finance structure in
place.

Reid agreed with this assessment, saying the two housing GSEs are
“trying to find their sea legs.”

The administration has said it is working on a comprehensive
overhaul of the housing finance system which it plans to introduce next
year.

Federal Reserve Chairman Ben Bernanke met with members of the
Senate Banking Committee Tuesday to brief them on the ongoing situation
in Greece and the Eurozone.

Dodd described the meeting as “very good,” and called the E720
billion support package put together by the EU as a “wise thing.”

** Market News International Washington Bureau: (202) 371-2121 **

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