The post that follows below was based on an report by dealReporter, which has been contested by Sen. Shelby’s office. A spokesman for Shelby, Jonathan Graffeo, sent the following statement: “Sen. Shelby opposes the bank tax proposal. He has not, however, expressed support for or opposition to the Volcker rule proposal. He said the proposal requires examination by the Banking Committee, which is why he called for hearings on the matter.”
The original post after the jump.
That was quick. Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee, is throwing cold water all over President Obama’s bank bashing populism of last month. According to dealReporter,
A proposal by former Federal Reserve Chairman Paul Volcker to limit bank’s proprietary trading will be either be dropped or significantly modified in the Senate, lawmakers and staffers told dealReporter. Senate Banking Committee ranking member Richard Shelby (R-AL) said he opposes the so-called Volcker rule and the Obama administration’s call to levy a USD 90bn tax on banks. . . . Speaking to this news service on Thursday, Shelby said if Democrats push forward with the proposals they risk unravelling much of the bipartisan support already reached regarding the passage of financial regulatory reform in the Senate. Shelby said that the Obama administration risks losing Republican support for the bill if they begin to “politicise” the issue.
This could just be a negotiating position, but the signs do not point to much optimism. A staffer for Chris Dodd, the Democratic chairman of the committee, is quoted later in the story saying of his boss, “He is not going to risk bipartisan support to make the White House happy.”
So much for the suspense.
In other (mostly unrelated) news, financial sector stocks rose on Monday, driven by enthusiasm for regional banks.