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Banks to keep swap desks

THE outlook for a plan to force banks to spin off their swap-trading desks dimmed yesterday when an Obama administration official made clear it is not a core Wall Street reform goal for the White House.

The plan – proposed by Democratic Senator Blanche Lincoln, who faces a reelection challenge – is one of the most controversial components of a Senate bill approved last week.

And major banks, whose profits could be hit by the Lincoln plan, are lobbying in Congress to kill it.

“For the Obama administration, overhauling financial regulation is a top priority and involves certain key goals, but the Lincoln plan is not one of them, Assistant Treasury secretary Michael Barr said yesterday raising hopes for banks that they will keep the lucrative revenue stream.