Not all banks have reason to fear Wal-Mart, it turns out.
The Journal reports that Sen. Blanche Lincoln, the Arkansas Democrat behind the push to crack down on bank derivatives trading, is backing a change that would exempt Arvest from rule changes that would force it to raise more capital.
Lincoln has beaten back strong Wall Street opposition to her rules on derivatives, which are expected to be threshed out in Congress today. She has spoken of proposing "real reform" and promoting "a financial oversight system that promotes and fosters the most honest, open and reliable financial markets in the world."
But she is now pushing to raise by 50% the threshold at which banks would be subject to stricter capital rules, the Journal notes. Lincoln "believes the threshold should be high enough to ensure no bank in Arkansas is subject to these new rules on existing capital, which would hinder their ability to generate lending for consumers and businesses at a time when access to credit is already difficult to come by," her spokeswoman tells the Journal.
Applying the rules as Lincoln proposes could save the billionaire Walton family $115 million, the Journal says.
As the piece points out, congressional back-scratching is hardly unheard of. It came into full view this spring when Nebraska Democrat Ben Nelson tried to create a derivatives loophole for Warren Buffett's Berkshire Hathaway (BRKA).
So no shocker here. But as Lincoln surely knows, this sort of coziness doesn't do much to help the cause of "real reform."
Paul Volcker is coming to Wall Street -- and against all odds, Blanche Lincoln isn't far behind.
The financial reform bill wending its way through Congress this month is widely expected to include some form of the Volcker rule that aims to keep banks from making market bets using funds backed by the federal deposit insurance fund.
The announcement of the Volcker plan in January sent bank investors into a funk from MOREColin Barr - Jun 10, 2010 4:12 PM ET
Chalk up another vote against Blanche Lincoln's crackdown on the financial weapons of mass destruction.
Rep. Barney Frank, D-Mass., said in a speech in Washington Tuesday that the regulatory reform bill passed by the Senate last week "goes too far" in proposing to bar the biggest banks from dealing in derivatives.
Five bank holding companies -- JPMorgan Chase (JPM), Bank of America (BAC), Goldman Sachs (GS), Citigroup (C) and Morgan Stanley (MS) MOREColin Barr - May 25, 2010 4:58 PM ET
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