Monday, June 21, 2010

State of Financial Reform

I remember hearing an interview with Elizabeth Warren on NPR a couple of weeks about about the financial reform bill. The House and Senate versions are being reconciled and she said each has good points and bad points and it all comes down to which things make it into the bill. It could still be very worthwhile or it could be worthless.

Today, Simon Johnson announces, Dead On Arrival: Financial Reform Fails. "The House-Senate reconciliation process is still underway and some details will still change. But the broad contours of ‘financial reform’ are already completely clear; there are no last minute miracles at this level of politics.  The new consumer protection agency for financial products is a good idea and worth supporting – assuming someone sensible is appointed by the president to run it.  Yet, at the end of the day, essentially nothing in the entire legislation will reduce the potential for massive system risk as we head into the next credit cycle."

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