–Senate’s Monday Evening Test Vote Will Intensify Reg Negotiations
–Senate Oversight Panel To Probe Key Goldman Executives Tuesday
–White House’s Fiscal Commission To Begin Work Tuesday
–Fiscal Summit Wednesday To Include Greenspan, Volker, Rubin, Orszag

By John Shaw

WASHINGTON (MNI) – As the Senate takes the first of several
critical votes on financial regulatory reform Monday evening, it appears
that Monday’s vote is more likely to intensify ongoing negotiations
between Democratic and Republicans leaders than resolve key issues.

The Senate will vote Monday evening to formally begin consideration
of the financial regulatory reform bill drafted by Senate Banking
Committee Chairman Chris Dodd.

It will require 60 votes to begin the debate and by all indications
the 41 Senate Republicans will vote against this motion.

Senate Minority Leader Mitch McConnell said Sunday in a TV
interview that he believes Republicans will be able to block the motion
to begin the debate.

“It’s my expectation that we will not go forward with this partisan
bill tomorrow,” McConnell said.

“It’s not ready yet,” he said.

Failure to formally begin the Senate debate would further fuel
partisan exchanges between Democrats and Republicans and intensify
behind-closed-door negotiations between Dodd and Sen. Richard Shelby,
the ranking Republican on the Banking Committee.

Both Dodd and Shelby have said they’ve been narrowing their
differences on the legislation, but have not been able to reach an
agreement on the legislation.

The Senate Banking Committee approved Dodd’s regulatory reform bill
on March 22 on a party-line 13 to 10 vote. All Democrats supported the
bill and all Republicans opposed it.

Dodd’s legislation establishes a new independent Consumer
Protection Bureau at the Federal Reserve Board, creates a process to
liquidate failed financial firms, sets up a council of regulators to
oversee systemic risk in the economy, establishes a regulatory structure
for over-the-counter derivatives, requires hedge funds that manage over
$100 million to register with the SEC and creates a new office within
Treasury to monitor the insurance industry.

The Senate Agriculture Committee approved a narrower bill last week
that tightens regulation on derivatives. Elements of this bill are
expected to be merged with Dodd’s bill when the formal Senate debate
begins.

President Obama has said that financial regulatory reform is one of
his central goals for the rest of this legislative session.

In other action this week, the Permanent Investigations
subcommittee of the Senate Homeland Security and Governmental Affairs
Committee will hold another hearing Tuesday on the financial crisis.

Tuesday’s morning session will include a number of Goldman Sachs
executives including Lloyd Blankfein, the firm’s CEO.

A subcommittee of the Senate Banking Committee will hold a hearing
Thursday morning on “short-termism in financial markets.” The panel will
hear from business, Labor and think tank officials and from Ohio
governor Ted Strickland.

A subcommittee of the Senate Finance Committee will hold a hearing
Thursday afternoon on the administration’s goal to double American
exports, focusing on the issue of whether American seaports are ready
for the challenge.

Finally, fiscal policy will take a high profile this week as the
president’s Fiscal Responsibility Commission holds its first session on
Tuesday.

Then Wednesday, the Peterson Foundation is hosting a day-long
fiscal policy summit in which former Federal Reserve Board chairmen Paul
Volker and Alan Greenspan will speak as will former President Bill
Clinton, former Treasury Secretary Robert Rubin, and current White House
budget director Peter Orszag.

The co-chairmen of the president’s fiscal panel, Alan Simpson and
Erskine Bowles, will also speak at the summit.

** Market News International Washington Bureau: (202) 371-2121 **

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