(Dow Jones) Top Obama administration officials traveled to Capitol Hill Wednesday evening as U.S. lawmakers struggled to bridge key financial overhaul issues, setting up a potentially dramatic showdown on how lawmakers will address the behavior of the nation's biggest banks.

Top House and Senate Democrats huddled behind closed doors and publicly throughout the day to no avail, leaving until Thursday to make final decisions on regulations that will affect everything from personal checking accounts to the lucrative swaps desks at the biggest Wall Street banks.

Among the issues left to be decided: how to limit banks' ability to trade their own capital alongside client funds; whether or how to require firms to split off their lucrative derivatives desks; giving shareholders greater proxy access; and possible leverage limits for banks.

Lawmakers also must reach agreement on federal preemption of state consumer banking laws, the fiduciary duty of brokers, and how to fund the Securities and Exchange Commission.

Regarding the fiduciary standard, the House wants to require the SEC to adopt rules to hold brokers, insurance agents and others who provide investment advice to retail customers to the same fiduciary standard as investment advisors under the Investment Advisers Act of 1940. That standard requires them to act in their clients' best interests.

The Senate has called for more studies on the issue.

On Tuesday night, Sen. Tim Johnson (D.,-S.D.) proposed a compromise calling for an SEC study on whether investment advisors and brokers should be held to the same standard of care, and then granting the agency the authority to create a single standard if it deemed it necessary to close the regulatory gap. 

Critics say the original Senate version calling for more studies would deny the SEC the authority it needs to raise the standard for brokers when they give investment advice.

The Senate compromise proposal is still being debated. 

The impasse on derivatives and a number of other issues led top Treasury Department and White House officials to meet with key negotiators and their staffs after members of the "conference committee" broke for the day. They were expected to work into the night to finalize the language on derivatives and the so-called "Volcker Rule."

Lawmakers showed their frayed nerves as talks dragged on Wednesday, with Sen. Christopher Dodd (D., Conn.) responding to a delay by reading William Butler Yeats "When You Are Old." After talks broke for the night, he expressed his frustration about the requests he's receiving from colleagues without commitments to vote for the final bill.

"I dread votes on the floor of the Senate I come back, I feel like a bulletin board, I've got notes stuck in every pocket from people who want things in the bill," Dodd said.

A key question will be how Democrats handle a controversial provision authored by Sen. Blanche Lincoln (D., Ark.) to require large banks to split off their swaps desks. House Democrats from New York on Tuesday approached Rep. Barney Frank (D., Mass.) about the issue to express their concern, and the issue was a key topic when House Speaker Nancy Pelosi (D, Calif.) and Senate Majority Leader Harry Reid (D., Nev.) met with negotiators Wednesday.

Lincoln, who is facing a tough reelection battle, stressed Wednesday evening that she does not want to weaken her measure.

"I hope others will be as anxious as I am to avoid another financial crisis," Lincoln told reporters.

Frank, when asked about the prospect of losing Democratic votes because of the fight over derivatives, said it is impossible to tell.

"It is too soon for people to either lock themselves in or me to think they're locked in to a hard and fast position," Frank said in an interview.

House and Senate negotiators did move towards agreement on some issues. House lawmakers, who had been pushing for the creation of a standing fund to deal with the cost of winding down a failing financial firm, agreed to drop their proposal. House lawmakers are pushing for a more structured repayment process to be funded by large financial firms that would create a tier system for which companies would have to pay for any taxpayer dollars used in resolving a failed firm.

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