by Dee Newman
Last week, after months of intense (million-dollar-a-day) lobbying by the financial industry and other corporate interests, the Senate finally passed a financial reform bill (if you can call it that with a straight face).
Wall Street executives must be extremely relieved and elated that the legislation thus far does little to fundamentally change how the industry does business.
Despite the false and disingenuous outcry from conservative Republicans and the industry’s lobbyists, warning that the legislation approved by the Senate last week will obstruct economic growth, most bankers and analysts think that the bill, though it may reduce Wall Street’s profits a bit, will leave the size and power of banks unfettered.
It’s true, both the House and the Senate versions of the legislation will create a much-needed Consumer Financial Protection Agency, however, the legislation does not eliminate the "too big to fail" banks, nor does it restore Glass-Steagall and its protections. Also, risky ambiguities and loopholes remain in the regulation of derivatives.
Without a doubt, further loopholes will surely be inserted during the House and Senate conference committee process. At this point, the financial industry seems quite confident that many of the most remedial requirements can be alleviated before the legislation is signed into law.
Though, in public, the big banks continue to grumble, privately, they are pleased beyond words, counting their record profits as their stocks continue to climb.