By Silla Brush and Vicki Needham - 05/18/10 09:35 PM EDT
Senate Banking Committee Chairman Chris Dodd (D-Conn.) moved Tuesday to limit a controversial provision targeting Wall Street's lucrative derivatives trading desks.
Dodd filed an amendment to the sprawling Wall Street bill that would delay for two years a ban on banks having in-house derivatives trading operations. A council of financial regulators would study the impact of such a ban, which was first proposed by Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.).
"I remain fully committed to my provision and will fight efforts to weaken it," Lincoln said today in a release. "I"m proud of the support my provision has received both inside and outside the Senate and will defend it should there be debate on the Senate floor."
The regulatory council could move to suspend the derivatives trading ban "in whole or in part" if it concluded the ban would have a "material adverse effect" on the economy.
The amendment was first reported by the Washington Post.
It is unclear when or how the amendment would come up for a vote.
The derivatives provision quickly became one of the most controversial parts of the financial bill, and sent banks lobbying strongly in opposition.
Federal regulators, including Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair, have come out against the Lincoln provision.