Swift US financial overhaul is 'unrealistic'

Republicans have warned Chris Dodd, the Democratic chairman of the Senate banking committee, that his aim to get a financial regulation bill to the Senate floor by the end of the month is unrealistic.

In a setback for Democrats' hopes of signing both healthcare reform and an overhaul of financial regulation into law within weeks, the Republican members of the banking committee wrote to Mr Dodd on Friday evening. They expressed "concern that your proposed timetable will not allow members sufficient time to fully understand the details of your new legislative proposals".

Mr Dodd is due to deliver a long-awaited new draft of regulation legislation on Monday before a "mark-up", or public revision, of the text the following week. He announced the timetable on Thursday after breaking off negotiations with Republicans aimed at cutting a private bipartisan deal.

The landmark bill will eventually be merged with a version passed last November in the House of Representatives. It would drive more over-the-counter derivatives through central clearing houses, introduce a "resolution authority" allowing regulators to wind down a failing financial institution and introduce new consumer protection regulation to oversee the sale of loans.

Bob Corker, the lead Republican negotiator for much of the last month, charged that the Democrats' ambition to pass healthcare reform before the spring break at the end of this month lay behind the curtailing of talks on regulation, which is competing for Congress's attention.

The letter was signed by all the Republican members of the banking committee, including Mr Corker, the senator from Tennessee, and Richard Shelby, the senior Republican on the committee, even though the two men have been at odds on whether it was worth negotiating with Mr Dodd.

In a letter whose politeness belies the potential roadblock to Mr Dodd's hopes of a speedy next stage, the Republican senators wrote: "Given the sheer magnitude and complexity of the financial reform package you intend to introduce, this legislation will inevitably have a substantial impact on our financial system and overall economy.  Accordingly, we urge you to allow for sufficient time to review the language."

Members of both parties are privately expressing scepticism that any agreement will be reached during the mark-up and the consensus expectation is for a partisan Democratic bill to be moved to the Senate floor before negotiations begin again in earnest to win Republicans around with amendments.

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