4:40: And we’re off the call. Still lots learn once we see the bill, such as how big the capital requirement increases will be for non-bank institutions, and we’re still a little clear how prop trading and market-making will be dilleneated, even though that’s part of what this bill aims to do.
4:31: Likely to gain GOP support a la credit card reform, which started with no GOP suppport.
4:27: Would Goldman Sachs (GS) be inclined to convert away from bank holding to continue as prop traders?
4:23: Bank holding companies would NOT be able to have segregated depository and trading divisions.
4:20: How this amendment changes the existing bill. Tightens language. More sharply defines prop trading.
4:19: How about a return to Glass-Steagall? Answer: Volcker Rule is very close.
4:18: How do other Senators feel? SOme support. Just starting to talk.
4:17: How does Geithner feel? Fairly supportive, but perhaps language in this bill is a bit sharper than what White House would have wanted.
4:16: Q&A time:
4:14: Someone else talking: big problem with prop trading is the connection between it and short-term funding. When short-term funding breaks down, trades go awry.
4:13: Mike Konczal explaining prop trading rules.
4:10: Call does three things.
- Strengthen wall between deposits and hedge funds.
- For non-lending banks (investment houses), higher capital requirements.
- Conflicts of interest. Not taking a position contra to your clients like in Goldman Sachs.
4:09: Senator Merkley: Pleased that we’re at the amendment stage of the bill.
4:08: Representative from Public Citizen previewing call. Volcker rule + actions against conflict of interest.
4:06: Senator Merkley joins the call.
4:03: Still getting started… Reporters joining call…
We’ll be covering the call here starting at 4:00. Refresh for latest.
Original post: Well, we told you that near the end of the day on Tuesday, Michigan Senator Carl Levin promised to introduce some new amendment.
Well, this just arrived in our inbox, and it marks a real attempt to get some version of the Volcker Rule into Dodd. We shall be listening.
Update: On Twitter, uber financial blogger and activist Mike Konczal says on Twitter that there will be conflict-of-interest language as well.
Telephone Press Conference Today: Sen. Merkley to Introduce Amendment That Would Restrict Banks’ Risk Taking
WHAT Telephone press conference to discuss the need for the financial reform bill to ban “proprietary trading” – banks’ use of their own resources to gamble in the stock, bond and over-the-counter markets.
Sens. Jeff Merkley (D-Ore.) and Carl Levin (D-Mich.) will introduce an amendment to prohibit banks from engaging in proprietary trading.
WHEN: 4 p.m. EDT, today, Thursday, April 29
WHO: Sen. Jeff Merkley (D-Ore.)
Jane D’Arista, economist
Dean Baker, co-director, centre for Economic Policy Research (invited)
Robert Weissman, president, Public Citizen
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