Sen. Judd Gregg (R-NH) says it should be no biggie for Congress to scrap a controversial proposal in the Senate Wall Street reform bill that would prevent large financial firms from trading derivatives in-house.
Last night I asked him whether anti-Wall Street sentiment might make it more difficult for House and Senate negotiators to get rid of the so-called “spin off” plan. Gregg shrugged it off.
“I wouldn’t think so, because it’s logical and it’s good language,” Gregg said.
“I mean there’s no partisan fight here, it’s just: let’s get the language right. And the language which is in the Senate bill is wrong. It’s just plain wrong. It’s going to cause significant contraction in the credit markets, and it’s going to make the derivative markets less stable less sound and push a lot of business and competition–business which we want in America–overseas.”
Gregg is likely to serve as a negotiator in the House-Senate conference committee, where differences between two Wall Street reform bills will be ironed out. The spin-off provision has become the focal point of the last round of Wall Street reform negotiations. It is loathed by Wall Street, leading Democrats, almost all Republicans and the White House, but has survived thus far because, well, it’s hard for politicians to publicly side with big banks these days.
But though it’s late in the game, major financial players are counting on a coalition of Democrats and Republicans to vote to scale back the spin-off provision, or scrap it altogether. The question is if they’re making things easier or harder on themselves by being so adamant about it.
