WASHINGTON (AP) -- A Democratic official familiar with Senate banking negotiations says a provision that would force banks to spin off their derivatives operations will be incorporated into sweeping regulatory legislation despite Obama administration misgivings.
The provision would cost the nation's largest banks billions of dollars in business. In an agreement struck Sunday, Banking Committee Chairman Christopher Dodd agreed to replace his proposed restrictions on derivatives with those of the Senate Agriculture Committee, chaired by Arkansas Democrat Blanche Lincoln.
Derivatives are financial products -- such as corn futures or stock options -- whose values depend on the values of underlying investments. Companies use them to hedge against risks, such as interest rate swings or oil price spikes. Derivatives also became vehicles for speculation and helped trigger the financial crisis.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
Have you seen the forecast for tomorrow?
Get the latest St. Louis weather forecast
Check out stuff you will never see on TV on our Facebook Fan Page