Senate Vote to Advance Financial Reform Stalls

The Senate can't find enough backers to end debate on the financial reform package in a Wednesday afternoon vote.
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WASHINGTON D.C. (

TheStreet

) -- The Senate failed to find the 60 votes it needed to move the financial reform package closer to a final vote in a Wednesday afternoon procedural effort.

The final tally of the failed "cloture" vote was 57-42, according to

C-Span

. It's not the first time that the Senate vote has failed to move the financial reform package ahead. The goal is still to move senators to a final vote on financial reform by the end of the week.

In a related Senate development on Wednesday, prospects for a watered down version of the financial reform legislation dimmed when Sen. Christopher Dodd (D-Conn.), said he would not seek a compromise on changes in the way that derivatives are traded.

Sen. Dodd's decision could be a blow to Wall Street, if and when the financial reform bill does move to a final vote in the Senate.

Negotiations had been under way just yesterday with Dodd to delay for two years the implementation of a requirement that banks spin off their derivatives trading units.

Dodd had been looking for ways to bypass a political stall triggered by the derivatives proposal, but a Dodd spokeswoman said on Wednesday that the Senator called for a vote on the proposal as it stands.

Big banks from

Goldman Sachs

(GS) - Get Report

to

JPMorgan Chase

(JPM) - Get Report

and

Bank of America

(BAC) - Get Report

have reaped hefty profits from derivatives trading.

During Tuesday night's primary elections, Sen. Blanche Lincoln (D-Ark.) was forced into a June runoff election by Lt. Gov. Bill Halter for the Democratic nomination. Lincoln has been one of the Senate architects of the derivatives component of the bill, and has sought to counter claims that she is too much of a Washington insider.

-Reported by Eric Rosenbaum in New York.

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