Financial Reform Package isn’t Great

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.

Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.