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Democrats forged a compromise on bank investments in hedge funds and private equity firms Wednesday, moving Congress one tiny step closer to passing financial regulatory reform. The new deal would allow banks to invest as much as 3 percent of their capital in hedge funds and private equity firms; the move marks a major mellowing of the proposed “Volcker Rule,” which sought to prevent deposit-taking banks from making more risky investments. One rule Wall Street has lobbied against remains, however: banks will be forced to spin off their swaps desk into separate institutions, a measure pushed by Sen. Blanche Lincoln (D-AR) and opposed by many federal regulators.