Wall Street is mounting a last-ditch push to influence the final shape of a historic financial overhaul package, now just weeks or even days from becoming law.
At stake are billions of dollars in lucrative businesses that banks either don't want to give up or don't want to change in ways that would dent their profits.
The next 48 hours will be critical. On Wednesday, U.S. lawmakers are scheduled to hammer out measures that restrict a bank's ability to make bets with its own capital. Then, on Thursday, they are due to take up changes to the way derivatives are traded.
For Wall Street, these are the last battles in the long war over financial regulation. Banks are trying to limit the scope of the proposed changes or postpone them, since in many cases the extent of the reform corresponds directly to the size of the potential hit to their earnings.
At the top of their agenda is killing a controversial measure inserted into the Senate version of the bill that could force banks to spin off their derivatives trading desks into separate entities.
Next on the wish list: watering down the so-called Volcker Rule, which prevents banks from using their own capital to place bets, whether directly or through hedge funds and private-equity vehicles.
If such reforms are implemented as currently envisioned, banks like J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. could see their earnings per share fall 18 per cent and 23 per cent, respectively, according to a recent report from Citigroup.
With President Obama travelling to the Group of 20 summit in Toronto, Congressional Democrats are aiming to hash out a final version of the bill by the end of this week. Their goal is to have the bill on the president's desk for signing before the July 4th national holiday.
"While the time left may be short, the decisions that will be made over the next few days will have huge impacts for the next generation," says Thomas Quaadman, a vice-president at the U.S. Chamber of Commerce who is lobbying against certain aspects of the bill. The coming days will be "long and require large amounts of caffeine."
A major remaining bone of contention relates to derivatives, instruments which fluctuate based on the value of an underlying variable. Just five U.S. banks - J.P. Morgan Chase, Bank of America Corp., Goldman Sachs, Citigroup Inc., and Wells Fargo & Co. - account for 97 per cent of the outstanding derivative contracts in the U.S., according to the latest figures from the Office of the Comptroller of the Currency.
The reform bill would force many derivative transactions onto clearinghouses and regulated trading platforms, spurring transparency and competition in a market that has consisted of private deals between two parties.
Such moves will cut into the margins Wall Street firms have enjoyed as middlemen in derivative transactions. But what banks truly detest is a provision championed by Senator Blanche Lincoln of Arkansas. That proposal could force them to exit the derivatives business entirely or oblige them to create separate subsidiaries with their own capital for such trading - also a hugely unpalatable prospect for banks.
No one - including the Obama administration - seems to like the Lincoln proposal, but it has acquired a life of its own. "It's the zombie guy that always comes back," says Paul Miller, a financial analyst at FBR Capital Markets.
Lawmakers will resolve the fate of the provision this week as they move to finish unifying the Senate and House versions of the bill. In exchange for diluting or removing the derivatives spin-off measure, banks may have to accept tighter restrictions on the bets they make with their own capital, says Mr. Miller.
Wednesday's proceedings could hint at such a compromise, when lawmakers take up issues related to the Volcker rule on "proprietary" bets by banks.