Republicans yesterday blocked a vote on the a rule that could bar banks from the hedge fund and private equity industries, potentially delaying the adopting of sweeping financial reforms in the U.S.
The version of the Volcker Rule crafted by Sens. Carl Levin (D-Mich.) and Jeff Merkley (D-Ore.) would exclude banks that do not take deposits, man loans or use the Federal Reserve’s discount window. It would also give firms that do time to extricate themselves from investments and businesses that would be banned by the law.
Levin and Merkley’s amendment would also allow banks to continue to invest client funds in hedge funds, but would specifically bar them from mixing their own capital with their clients’.
“I’m not inclined to vote for cloture if we can’t get a vote on this,” Levin said, referring to a vote to end debate on the overall financial package.