Another Blow to Wall Street

The lobbyists don’t always win: The Financial Times says that U.S. banks are resigning themselves to the fact that Congress will probably pass a law that will force them to spin off their swaps desks—a development that is even more likely after former Federal Reserve Chairman Paul Volcker softened his opposition to the measure. The legislation will force banks to create separately capitalized subsidiaries to run their derivatives operations. Volcker had opposed the measure, he said, because he believed a stricter one was in the works and he now says it’s a “relevant question” whether it will be dangerous to leave swap desks within banks. The White House hopes to sign the legislation into law by the end of next week.