Senators are considering legislation that would give regulators authority to restrict proprietary trading by banks. Sens. Jeff Merkley, D-Ore., and Carl Levin, D-Mich., are seeking to prohibit such trading by banks, while other large financial firms would have restrictions on their proprietary trading. Ken Bentsen, executive director at SIFMA, said more studies are needed and that it is difficult to define what constitutes proprietary trading. "That is going to take the regulators time to figure out," he said. "Some of this stuff is in a gray area."

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