So the Senate seems poised to move forward on financial reform. On Monday Chairman Chris Dodd of the Senate Finance Committee approved a 1336 page bill aimed at preventing the next financial meltdown. There are many important provisions in the bill, including shareholder rights, the Kanjorski Amendment authorizing prudential divestitures, a new consumer protection regime, derivatives regulation and new hedge fund regulations. All of this is good news.
Yet, on the flip side there is still much cause for concern. The lobbyists seemed equally poised to water down the bill, with the US Chamber of Commerce alone prepared to spend $3 million to lobby against the bill. Moreover, it is interesting that the bank index considers the bill a non-event.
So, I suppose it is a step in the right direction. Yet, I have this sinking feeling that it is Sarbanes-Oxley all over again. A step in the right direction that will do little to stop the next meltdown.