Like I said yesterday, originally I didn’t take Lincoln’s proposal seriously. It seemed like it was just a stalking horse, a way for her to look tough and get some good hometown headlines even while knowing that it would quickly get watered down. And that might still happen, of course. Her derivatives language still has to survive a merger with the Banking Committee bill, a vote on the Senate floor, and then the conference report. The odds of coming through all that unscathed are pretty remote.
But….you never know. Republicans are obviously feeling some heat on this, and it’s not as though anyone outside of Wall Street has any sympathy for the derivatives industry. For now, this remains a possible bright spot on the financial reform horizon.
Frankly, I don’t think her language should get through unscathed as some of the stuff (spinning off swap desks, etc.) really has nothing to do with the main point of this section of the bill which is to get derivatives centrally cleared and traded on exchanges. The real point of this vote is that three weeks ago people were talking about Dodd’s language getting watered down by the Agriculture Committee but thanks to some focus on the issue and Bill Halter’s primary campaign that didn’t happen. So what went down today is very good news.