Edmund Andrews who used to cover these issues for the New York Times and now is at the Fiscal Times and blogging at Capital Gains and Games says it’s very good indeed:
Against that backdrop, it’s astonishing that the Senate bill actually became stronger as the process dragged on. The proposed consumer financial protection agency is stronger and I believe more independent than it would have been in the original Senate bill (more on that in a moment). The multi-trillion market in financial derivatives, which is almost unregulated right now, would for the most part have to be take place on exchanges or at least through clearinghouses — either of which require greater transparency and more pfront capital by the players. Banks, whose deposits are federally insured, would be prohibited from trading derivatives. And as an added surprise bonus, from none other that freshman Senator Al Franken, the bill includes a very smart reform to fix the corrupt busines model of credit-rating agencies.
You can argue that some of these reforms will backfire, and some probably will. But you cannot argue that the reforms amount to little or nothing. These are big changes.
He then goes on to quote Heather Booth of Americans for Financial Reform—the main labor and community group backed progressive lobby on this—who is likewise enthusiastic.
What I would say is this. The bill contains a number of provisions that make large bank failures less likely. It also contains provisions that make it less likely that a bank failure would cause a systemic meltdown. And on top of that it contains a much-improved process for dealing with bank failures, making it much less likely that a failure will lead to a politically toxic and massively unfair TARP-style “bailout.” It’s not airtight on any of those fronts, but it makes headway and when you combine it all together it’s a big impact.
That said, the financial crisis has also raised a lot of questions in people’s minds about the role of finance in the US and global economies. And the bill doesn’t do anything at all about those issues. Near the end of her book, Gillian Tett laments that “in the last two decades, as finance spun so out of control, it stopped being a servant of the economy but became its master” and to whatever extent that was true when she wrote it, it’ll still be true after Barack Obama signs this legislation. And that will be the case for all plausible values of “this legislation”—you can mix and match House and Senate provisions any way you like and nothing about the structure of the industry and the U.S. economy will be fundamentally altered.
As I wrote reviewing Tett I think it would actually be a mistake to try to address this point via the financial regulation process. But I also think it would be a shame to simply let it drop. The answer, it seems to me, is actually quite simple—higher taxes to finance more and better public services.