Welcome to the Friday edition of your open thread. I’m back in Delaware today where the ground stays where it’s supposed to be, thank you very much!
The House & Senate conference on the financial reform bill reached a compromise last night. According the WSJ the bill is stronger than expected in two ways:
Lawmakers agreed to a provision known as the “Volcker” rule, named after former Federal Reserve Chairman Paul Volcker, which prohibits banks from making risky bets with their own funds. To win support from Sen. Scott Brown (R., Mass.), Democrats agreed to allow financial companies to make limited investments in areas such as hedge funds and private-equity funds.
The move could require some big banks to spin off divisions, known as proprietary-trading desks, which make bets with the firms’ money.
The bill also includes a provision, authored by Sen. Blanche Lincoln (D., Ark), which would limit the ability of federally insured banks to trade derivatives. This provision almost derailed the bill following vehement objections from New York Democrats. Ms. Lincoln worked out a deal in the early hours of Friday morning that would allow banks to trade interest-rate swaps, certain credit derivatives and others—in other words the kind of standard safeguards a bank would take to hedge its own risk.
Banks, however, would have to set up separately capitalized affiliates to trade derivatives in areas lawmakers perceived as riskier, including metals, energy swaps, and agriculture commodities, among other things.
Tea Party and Club for Growth darling Marco Rubio seems a bit confused about what he meant when he signed the Club for Growth pledge to repeal the health care reform law.
Florida senatorial candidate Marco Rubio, once a strong advocate for repealing the entire health care law and replacing it with “real reforms,” is now telling reporters that he would not repeal the law’s pre-existing conditions exclusions and the provisions that allow children to stay on their parents’ policies until age 26. From National Review’s Jim Geraghty:
A small group of reporters in a D.C. coffee shop, chatting with Florida Republican Senate candidate Marco Rubio. He just mentioned that there are two parts within the Obamacare legislation that he doesn’t want repealed. The first is the ban on insurance companies denying coverage based on preexisting conditions and the second is that he thinks that children up to age 26 should be allowed to “buy into” their parents’ coverage.
The Florida Senate race is going to be fascinating. Charlie Crist is running as the de facto Democrat. I have no doubt that if Crist caucuses with the Democrats he’ll be a huge PITA like Joe Lieberman.