As the Senate moves forward with passing its landmark financial reform bill, it has at least reached an agreement on one important component -- the "too big to fail" provision. The Dodd-Shelby accord was supposed to include a proposed $50 billion fund, paid by large financial firms to cover the costs of break up firms when they get in a bind.
There are several other proposals and provisions still being discussed. A proposal by Blanche Lincoln calling for banks to spin off their derivatives business is losing steam, but it is still on the table. Let's not forget that it was the wild speculation in derivatives that caused our financial meltdown. To do nothing on this issue borders on irresponsibility.
A key issue is also bringing transparency to derivatives trading. Where is the proposal forcing financial institutions to place their trades on trading platforms? As it now stands, these trades are made in private, behind closed doors.
But another proposal, supported by Treasury Secretary Geithner, would impose a tax on financial institutions to ensure that future cost of bailouts is fully recouped.
One has to ask: What if anything is being reformed in the bill? The $50 billion bailout fund was scrapped and the other components are sliding off the table as Senate leaders argue the issues. What is left is a fancy 1,600-page reform bill that has no concrete provisions to stop the greed and abuse that brought our country to its knees.
No doubt, any group of people could have done better in a few minutes, on one sheet of paper. But then again, Congress needs good press and this grabs headlines. Can you see it now? "Congress passes financial reform bill."
Will this bill really change Wall Street?