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US Democrats axe $19bn bank fee for Senate vote

US Democrats yesterday offered to drop a proposed $19bn (£12.6bn) bank fee in a desperate bid to win enough votes to pass the Wall Street reform bill.

The lawmakers have been forced to make concessions to win the vote of Scott Brown, the Massachussetts senator who joined negotiations after the death of Senator Robert Byrd.

The bank fee was due to be levied on banks with more than $50bn in assets and hedge funds with over £10bn. But under the new deal, uncommitted money from the $700bn troubled asset relief programme (Tarp) would be used instead.

Brown, who has already haggled for banks to have the right to invest up to three per cent of their capital in hedge funds, wrote: “If the final version of this bill contains these higher taxes, I will not support it.”