(Ed. Note: We have a face-off here at CNBC.com. Senior Editor John Carney has one take on Blanche Lincoln's victory below. But Reporter Kate Kelly sees a different outcome. You can find that here).
Top Wall Street bankers say many reading the political tea leaves from Sen. Blanche Lincoln’s primary victory in Arkansas yesterday have things exactly backward.
Instead of guaranteeing strict limits on the use of derivatives by bankers, Sen. Lincoln’s victory may pave the way for the limits to be watered down or dropped altogether. Others, however, are not so optimistic.
Lincoln sponsored the derivatives language in the Senate version of the financial reform bill. A conference of House members and Senators are set to begin negotiations this week to reconcile the two bills.
The House bill doesn’t contain the derivatives restrictions.
Lincoln took up a hard line on Wall Street to fend off a challenge from the left. Unions and other liberal groups were backing Arkansas Lt. Gov. Bill Halter in his primary challenge. The crack down on derivatives was an attempt by Lincoln to show that she could get tough on Wall Street.