- John Kemp is a Reuters market analyst. The views expressed are his own -
Financial reform legislation is set to reach the Senate floor as early as this week. With U.S. President Barack Obama and Senate Majority Leader Harry Reid holding most of the cards, pressure on Senate Republicans and Wall Street to find a compromise is becoming intense.
The Senate Banking Committee's own version of reform (S 3217) was placed on the calendar of the Senate late last week (Calendar No 349) from where the Democratic majority leader can call it up for debate at any time.
In practice, Reid will wait until the Senate Agriculture Committee has had time to approve its own version of derivatives rules. The Agriculture Committee claims jurisdiction over some aspects of derivatives law. It is due to meet on Wednesday to approve a bill drafted by Chairman Blanche Lincoln (D, Arkansas).
Under Senate Rules, the majority leader has almost absolute control over the order in which legislation is called up for debate. Once the Lincoln bill has been reported out of committee, Reid will have discretion to call up the banking and agriculture committee bills any time, which could be as early as Thursday this week.
The banking and agriculture bills need to be melded together in some way. Either Reid will offer a compromise text of his own incorporating elements of both, or the majority leader will bring up the banking bill, perhaps with some or all of the agriculture bill being offered as an amendment.
Ultimately, Senate legislation must be reconciled with the separate Wall Street Reform and Consumer Protection Act (HR 4173) promoted by House Financial Services Committee Chairman Barney Frank and approved by the House of Representatives in December last year by 223 votes to 202.