Republicans in the US Senate on Tuesday leaked an alternative package of regulatory reforms that would put a stop to credit channelling by the Federal Reserve, and specify that the central bank's lender of last resort operations can only apply to banks facing liquidity troubles.

The proposals have been crafted in opposition to a bill put forth by Chris Dodd, a Democrat and head of the upper chamber's banking committee, which on Monday failed to garner the votes required for an open debate.

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