WASHINGTON Senate Agriculture Committee Chairman Richard G. Lugar said prospects are grim for a compromise on legislation that would protect swaps contracts from federal regulation.
The relevant parties were continuing to meet, and progress was being made, Sen. Lugar said in a statement Friday. Unfortunately, negotiations have appeared to stall.
Sen. Lugar said, however, that he would continue trying to make a deal. Democrats and Republicans have sparred over how broad the protection from regulation by the Commodity Futures Trading Commission would be for bank-executed swaps, and whether the SEC should be barred from regulating retail swaps transactions.
He warned that waiting until next year to address the issue could prove problematic because it is unclear which party will control the White House or Congress. Meanwhile, he said, faith in swaps contracts involving banks and other private parties could be shaken.
Failure to pass the Commodity Futures Modernization Act of 2000 will cause grave repercussions throughout the financial markets, he said. The $80 trillion over-the-counter swaps industry will continue to live under the shadow of uncertainty cast by current law.
Now is the time to act, he said.