Chamber, manufacturers lobby to kill anti-Wall Street derivatives measure

The country's biggest manufacturing and business interests are urging senators to kill financial legislation requiring Wall Street banks to spin off their derivatives desks.

The U.S. Chamber of Commerce, National Association of Manufacturers and Business Roundtable, among other groups, are urging the Senate to drop the requirement.

The provision has quickly developed into one of the most contentious parts of legislation aimed at regulating the multitrillion-dollar market for financial derivatives, which some blame for exacerbating the financial crisis. Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.) first proposed the "spin-off" provision. Bank analysts say it could lead banks to raise tens of billions of dollars to capitalize their derivatives operations.

The business groups are part of the Coalition for Derivatives End-Users, which sent a letter to the Senate yesterday outlining its opposition to the provision.

The provision could hurt business and commercial end-users by, "reducing or eliminating available counterparties," with which to do derivatives deals, the coalition argued in the letter. Banks dominate the derivatives industry, with five banks accounting for 97 percent of the total face value of U.S. market.

Banks and financial trade associations have been lobbying aggressively to remove the provision. Sens. Mark WarnerMark Robert WarnerRegulators push for 'coordinated' approach to bitcoin trading House funding bill includes bipartisan Medicare reforms Overnight Tech: Mulvaney reportedly froze Equifax hack probe | Dems want new restrictions on Comcast-NBC | NJ gov signs net neutrality order | Senate confirms patent chief MORE (D-Va.) and Kirsten GillibrandKirsten Elizabeth GillibrandBritish health secretary fires back at Trump over universal health care claims Trump on Dems’ ‘universal' health-care push: ‘No thanks’ Gillibrand calls for DOJ to investigate US Olympic Committee over abuse scandal MORE (D-N.Y.) have raised concerns about the measure and its impact on the derivatives market.