–Key Republican Senator: ‘Considerable Progress’ On Too Big Too Fail
–Sen. Shelby: Derivatives Language ‘Not Totally Resolved’ Yet
–Senate Minority Leader: Dodd Bill Is A ‘Dramatic Overreach’
–Senate Majority Leader: Going To Work on Reg Bill ‘As Long As We Can’

By John Shaw

WASHINGTON (MNI) – Sen. Richard Shelby, the ranking Republican on
the Senate Banking Committee, Tuesday said that his negotiations with
Sen. Chris Dodd, the chairman of the Banking panel, have been
productive, but have not yet secured an agreement.

At a briefing with Senate Minority Leader Mitch McConnell, Shelby
said the “biggest obstacle” to reaching an agreement regards the
proposed consumer protection entity.

Shelby said the talks have made “considerable progress” in crafting
language related to the ‘Too Big To Fail’ dilemma.

He said work on the section regarding regulation of
over-the-counter-derivatives is not “totally resolved” yet.

“That has not been worked out yet,” Shelby said.

He said there continues to be a “lot of anxiety” regarding the
appropriate exemptions for end-use derivatives users.

Speaking more broadly, Shelby said “the spirit of the negotiation
is good.”

Shelby said that he wishes the legislation included reforms of
Fannie Mae and Freddie Mac and the role of credit rating agencies.

Credit rating agencies, Shelby said, had a “lot of culpability” for
igniting the financial crisis.

McConnell, speaking after Shelby, said the bill drafted by Dodd is
a “dramatic overreach,” charging that it reaches into every nook and
cranny of American business.”

McConnell said it would be better for Shelby and Dodd to continue
their “quite serious discussions” on regulatory reform rather than
holding another Senate vote which is scheduled for 4:30 p.m.

Reid, speaking after Shelby and McConnell, said it was time to end
private negotiations and begin to work on the bill on the Senate floor.

He said Democrats support an “open amendment process” while
Republicans are seeking to craft an agreement behind closed doors.

“The negotiations have gone on for a long time … for months,”
Reid said.

“We want to do it in the open,” Reid said.

Reid vowed to press ahead with his strategy of Senate votes to
begin debate.

“We’re going to stay on this legislation as long as we can,” he

In the first test vote Monday evening, Senate Republicans united to
defeat a Democratic motion to formally begin debate on the financial
regulatory reform bill.

The Senate voted 57 to 41 to begin the debate, but sixty votes were

All Republicans who were present voted to block the debate from
going forward. (Two Republican senators did not vote.) All Democrats
voted to begin the debate except for two: Nebraska Senator Ben Nelson
and Senate Majority Leader Harry Reid.

But Reid changed his vote to No only after the outcome was apparent
for procedural reasons. This allowed him to bring the measure up again
for a future vote.

Democratic leaders have said they will continue to hold votes on
the Senate floor to formally launch the regulatory debate as a way to
put pressure on Republicans.

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

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