Nomi Prins at Alternet.org explains why the Democrats financial reform bill really isn't all that:
It won't make the biggest most "systemically important" banks (read:
systemically destructive) any smaller. It won't even reduce the size of
banks like Bank of America and Wells Fargo that are operating with more more than 10
percent of U.S. insured deposits -- a limit currently imposed by
law. Instead, it will add another 10 percent liability cap that banks
can ignore, allow the Fed to keep selectively merging banks, and then
create a new council to determine still more concentration limits that
can subsequently be ignored. Regulators had plenty of power going into
the crisis. Congress needs to force them to exercise it, and force a
breakup of the biggest banks, now. Those that failed the economy last
time around cannot be expected to get it right next time with an
expanded set of powers.
Prins lists a further 9 reasons why the legislation is pretty crappy and is well worth a read. Matt Taibbi points out that there are some good elements to the bill, but the real key to making it work is ensuring existing legislation is enforced properly.