WASHINGTON (Reuters) – Bipartisan efforts on Capitol Hill to tighten financial regulation ground to a halt in the Senate on Friday, casting one of the top domestic policy priorities of the Obama administration in a stark political light.

After months of public debate and closed-door talks, Senate Banking Committee Chairman Christopher Dodd, the Democrats’ chief negotiator, said he has been unable to agree on a bill with his Republican counterpart, Senator Richard Shelby.

“We have reached an impasse,” Dodd said, adding he is drafting new legislation to be considered later this month. “While I still hope that we will ultimately have a consensus package, it is time to move the process forward.”

The situation leaves Democrats to proceed alone on an initiative of international significance since the 2008 financial crisis, while painting Republicans — allied with banks and Wall Street — into an uncomfortable obstructionist corner.

WASHINGTON (Reuters) – Bipartisan efforts to tighten U.S. financial regulation ground to a halt in the Senate on Friday, leaving Democrats to proceed on their own and painting Republicans into an uncomfortable political corner.

After months of public debate and closed-door talks, Senate Banking Committee Chairman Christopher Dodd, chief negotiator for the Democrats, said he is at an impasse with his Republican counterpart, Senator Richard Shelby.

Dodd said in a statement he will begin drafting new legislation to be considered later this month.

“Last night, Senator Shelby assured me that he is still committed to finding a consensus on financial reform, but for now we have reached an impasse,” Dodd said.

WASHINGTON (Reuters) – By declaring an impasse in the financial reform debate, Senator Christopher Dodd will speed movement toward a vote and force the hand of Republicans, Representative Barney Frank told Reuters on Friday.

“Chris is forcing the pace here. He gave them plenty of time, but at some point people are going to have to vote on this. It’s going to be a test of the Republicans,” said Frank, the Democratic chairman of the House of Representatives Financial Services Committee, in an interview.

Dodd, the Democratic chairman of the Senate Banking Committee, said in a statement on Friday that he is at an impasse with his Republican counterpart, Senator Richard Shelby. Dodd said he intends to move ahead with legislation.

Frank said he is still confident there will be a House-Senate conference before summer to agree on a single bill to send to President Barack Obama. “What Senator Dodd is doing is perfectly reasonable on all fronts,” Frank said.

WASHINGTON, Feb 4 (Reuters) – The U.S. Senate on Thursday looked increasingly likely to adopt, at best, only a watered-down version of the Obama administration’s ambitious proposal to limit risky trading by banks.

After two hearings in three days on the issue, Senate Banking Committee Chairman Christopher Dodd told reporters it will be difficult to legislate a curb on bank trading practices as specific as the White House proposed last month.

He said it would be easier to include something less ambitious in a sweeping package of financial regulation reforms, under development for more than a year now, which aides said was fast nearing completion.

Dodd’s remarks signaled trouble for the proposal unveiled in late January by President Barack Obama as he moved to confront Wall Street’s excesses more aggressively following a loss for Democrats in a special Senate election in Massachusetts.

WASHINGTON (Reuters) – Senate Banking Committee Chairman Christopher Dodd said on Thursday it will be hard to write a bill to curb proprietary trading by banks as specific as the White House proposed in its so-called “Volcker rule.”

In a sign of trouble for the rule unveiled last month by President Barack Obama, Dodd said it would be easier to write a bill requiring regulators to examine questions related to the proposal backed by White House economic adviser Paul Volcker.

“We’ll see how it can be done,” Dodd told reporters after two hearings in three days in which the rule got a chilly reception from many lawmakers amid talk that its chances for adoption, at least as proposed, looked increasingly slim.

“It’s going to be hard to write something as specific maybe as Paul Volcker recommended, but it’s not as hard to write a requirement that the appropriate regulators examine this question,” Dodd said after gaveling the second hearing closed.

WASHINGTON, Feb 4 (Reuters) – U.S. Senate Banking Committee Chairman Christopher Dodd said on Thursday it will be hard to write a bill to curb proprietary trading by banks as specific as the White House proposed in its so-called “Volcker rule.”

In a sign of trouble for the rule unveiled last month by President Barack Obama, Dodd said it would be easier to write a bill requiring regulators to examine questions related to the proposal backed by White House economic adviser Paul Volcker.

“We’ll see how it can be done,” Dodd told reporters after two hearings in three days in which the rule got a chilly reception from many lawmakers amid talk that its chances for adoption, at least as proposed, looked increasingly slim.

“It’s going to be hard to write something as specific maybe as Paul Volcker recommended, but it’s not as hard to write a requirement that the appropriate regulators examine this question,” Dodd said after gaveling the second hearing closed.

WASHINGTON (Reuters) – The Obama administration’s proposed “Volcker rule” could impact about 10 percent of Goldman Sachs <GS.N> net revenues, a senior executive of the Wall Street giant told a U.S. Senate committee on Thursday.

His remarks came in the second of two hearings this week by the Senate Banking Committee on Obama administration proposals made last month to limit risk-taking by major banks in the wake of the financial crisis.

Gerald Corrigan, a Goldman managing director, told the hearing about the potential impact of the proposals to curb proprietary trading by banks and get them out of hedge fund and private equity businesses.

“If you took net revenues associated with … proprietary trading and hedge fund and private equity funds, we are in net revenues talking about something over the cycle in the broad order of magnitude of 10 percent,” Corrigan told the hearing.

WASHINGTON, Feb 4 (Reuters) – The Obama administration’s proposed “Volcker rule” could impact about 10 percent of Goldman Sachs <GS.N> net revenues, a senior executive of the Wall Street giant told a U.S. Senate committee on Thursday.

His remarks came in the second of two hearings this week by the Senate Banking Committee on Obama administration proposals made last month to limit risk-taking by major banks in the wake of the financial crisis.

Gerald Corrigan, a Goldman managing director, told the hearing about the potential impact of the proposals to curb proprietary trading by banks and get them out of hedge fund and private equity businesses.

“If you took net revenues associated with … proprietary trading and hedge fund and private equity funds, we are in net revenues talking about something over the cycle in the broad order of magnitude of 10 percent,” Corrigan told the hearing.

WASHINGTON, Feb 4 (Reuters) – The chairman of the U.S. Senate Banking Committee, Christopher Dodd, blasted banks and Wall Street on Thursday for a refusal to work with Congress on financial reforms that “borders on insulting to the American people.”

Criticizing financial firms for hiring “an army of lobbyists” to fight reforms, Dodd opened a hearing with banking executives by saying the Obama administration’s new proposals to limit the size and risk-taking of big banks were on the right track, but “will be no easy feat” to implement.

At the hearing, a prominent Goldman Sachs Group <GS.N> executive expressed support for some of the financial regulatory reforms being considered by Congress since taxpayers bailed out Goldman and other similar firms.

Gerald Corrigan, a managing director at Goldman who is a former president of the U.S. Federal Reserve Bank of New York, said he backs creating a “systemic regulator” to monitor the economic big picture, as well as raising capital and liquidity standards for banks. Both proposals have wide political support.

WASHINGTON (Reuters) – The White House has some quick explaining to do if it wants to convince lawmakers that a proposed limit on risk-taking by big banks needs to be included in financial reforms that are already more than a year in the making.

The 11th-hour rule, proposed late last month by President Barack Obama and inspired by White House economics adviser Paul Volcker, could be left behind as the U.S. Congress moves toward a bipartisan deal on tighter financial regulation, said some analysts and congressional aides on Wednesday.

After a less-than-illuminating Senate Banking Committee hearing on Tuesday, some predicted the proposal, known as the “Volcker rule,” is doomed.

Other proposals for financial reform, however, have been greeted with similar pessimism but then managed to clear procedural hurdles. And some analysts said the Volcker rule could be watered down and included in a final legislative package expected to emerge from the banking committee as early as mid-February.