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Libor Legal Fix for Phase-Out Hits Hurdle in Congress Tax Spat

  • Bill held up in House as lawmakers wrangle over language
  • Banks have ‘enough work as it is,’ TD Securities analyst says
Democratic Representative Brad Sherman, who is sponsoring the Libor legislation.

Democratic Representative Brad Sherman, who is sponsoring the Libor legislation.

Photographer: Kevin Dietsch/UPI/Bloomberg 

U.S. legislation designed to protect trillions of dollars of assets from chaos when global regulators phase out the interest-rate benchmark Libor is being held up in the House, over a dispute involving tax-related language, according to lawmakers and congressional aides.

Democratic Representative Brad Sherman, who is sponsoring the legislation, said lawmakers are divided about whether to include language aimed at preventing the Internal Revenue Service from recalculating firms’ tax liability at the moment that contracts transition -- a move that could in theory eat into profits for financial institutions.