Finance Space

Banks would be barred from high-risk speculative trading under a measure that has an “extremely good” chance of becoming law, Democratic U.S. Senator Carl Levin said on Monday.

The measure also would require large nonbank institutions to set aside additional capital to cover the risks of speculative activity, and prohibit financial firms from betting against their customers.

It would toughen a sweeping rewrite of financial regulations currently being debated in the Senate.

Levin and fellow Democratic Senator Jeff Merkley said their proposal has wide support among Democrats, in particular Banking Committee Chairman Christopher Dodd, who is overseeing the legislation.

Senate Republicans voted to block a bill aimed at tightening regulation of the financial system from being debated yesterday, in a move President Barack Obama said American people “can’t afford”.

The Democrats needed 60 votes from the 100 senators in the house to begin debating the bill, which proposes a government levy on big banks, changes to rules on derivatives trading and the establishment of a consumer financial protection agency.

The White House officially endorsed the bill before the vote, and had been hoping that the $1bn (£650m) fraud prosecution of Goldman Sachs would give fresh wind to anti-Wall Street sentiment, making the case for accepting the proposals unavoidable.