Of course, the Senate and House need to vote before the bill becomes law, but lawmakers and President Obama have expressed confidence that the necessary compromises have been made to get the votes. (The death early Monday of Sen. Robert
Byrd, D-W.Va., could complicate that.)
Here is a quick look at what the bill (HR 4173) would do.
Would it prevent future panics?
The Washington Post editorialized on Sunday: "No one should entertain the idea that this bill, whatever its pluses and minuses, has banished the specter of financial crisis — because financial crisis is, ultimately, rooted in human folly."
That's true, of course. Just read the classic book, "Manias, Panics and Crashes: A History of Financial Crises," which recounts, in a fairly gripping way, financial crises dating back to 1618. "Investors seem not to have learned from experience," author Charles Kindleberger writes drolly.
President
Obama says the bill would put in place "the strongest consumer financial protections in history" and would "end the days of taxpayer-funded bailouts, and help make sure Main Street is never again held responsible for Wall Street's mistakes."
Most Republicans and business groups don't like the final bill any better than they did the previous versions.
Sen. Judd
Gregg, R-N.H., says it "will not encourage much-needed stability and confidence in our financial markets. It will not significantly reduce systemic risk in our financial sector."
John J.
Castellani, president of the Business Roundtable, which represents big U.S. companies, says: “Far from effective reform, this legislation includes provisions totally unrelated to the financial crisis which may disrupt America’s fragile economic recovery and increase instability and risk."
Even bill advocates see gaps and tradeoffs,
The Wall Street Journal says. The bill restrains banks but doesn't break them up. It doesn't end banks' reliance on short-term borrowing. The mechanism to put failing banks out of business doesn't ensure their failures won't be disruptive.
Republicans complain the bill doesn't address the problems posed by mortgage giants Fannie Mae and Freddie Mac. The bill counts on international talks to harmonize national responses to the crisis into a global whole, leaving concerns that U.S. competitiveness could be undermined.
Wall Street historian and finance professor Charles
Geisst says the bill's effects won't be as fundamental as those made in the wake of the Great Depression. “It doesn’t go anywhere near,” he says. “It doesn’t change institutional behavior like that did. This is business as usual, with some moderation.”
Cornelius
Hurley, a professor at the Boston University School of Law and former counsel to the Federal Reserve Board of Governors, says, "This is a bill, despite its length and complexity, that’s more geared to the elections than the financial system.” He adds, “In no way does it address the too-big-to-fail issue.”
Sixty-four percent of Americans aren't confident that the bill will avert another meltdown, according to an
Associated Press-GfK poll.
To paraphrase Bette Davis: Keep your seatbelts fastened; it may continue to be a bumpy ride.