Wednesday, May 19, 2010

Jamie Dimon Begs for Help on Financial Reform

By Victoria McGrane and Damian Paletta WASHINGTON (Dow Jones)--

A top Wall Street executive urged U.S. Senate lawmakers to remove a controversial derivatives provision from the financial-overhaul bill, after opposition from the financial industry helped sink a fix proposed by Senate Banking Committee Chairman Christopher Dodd.The Dodd amendment would have delayed for two years any ban on derivatives trading and given the Treasury Secretary the ability to quash the proposal outright.Wall Street banks complained, saying the two-year window would create uncertainty and make it nearly impossible for them to offer derivatives contracts. Liberal Democrats also loudly voiced their opposition, claiming Dodd was trying to gut a central part of their effort to crack down on Wall Street banks.But that hasn't quelled their opposition to the ban itself."With the events in Europe and constantly changing proposals in Washington,global markets are in need of certainty," Jaime Dimon, president and chief executive officer of JPMorgan Chase & Co., said Wednesday. "The U.S. should take the approach of passing sensible derivatives reforms based on facts and analysis. I am hopeful our legislators will take a responsible path and avoid actions that will disrupt markets and force these products into unregulated entities."Specifically, Dimon and others want the Senate to vote on an amendment filed by Sen. Judd Gregg (R., N.H.) that would strip out the provision that would force big banks to spin off their derivatives operations into affiliates.The swaps prohibition, written by Senate Agriculture Chairman Blanche Lincoln(D., Ark.), has drawn opposition not only from Wall Street bankers but also top Obama administration officials, including Treasury Secretary Timothy Geithner,Federal Reserve Chairman Ben Bernanke and White House economic adviser and former Fed Chairman Paul Volcker.Dodd announced his intention to drop his proposed fix to the swaps ban Wednesday. He indicated in a brief interview that it was unlikely any other changes would be offered to the derivatives piece of the broader bill now, with debate expected to end later this week.

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