Last Call

Chris Dodd's come through on financial reform, including the long-overdue creation of a consumer financial protection agency.

President Barack Obama's stuttering bid to rein in the largest US banks got a shot in the arm Monday, as a key Senate ally unveiled a package of bank reforms described as the most sweeping in 80 years.

Senate banking committee chairman Christopher Dodd outlined plans to regulate the massive US banking sector, warning an overhaul was needed to prevent another large-scale crisis that the US economy might not survive.

Speaking two years after the investment bank Bear Stearns collapsed -- the opening salvo in a crisis that engulfed the globe -- Dodd called for more government control over "too-big-to-fail" banks and for reform of a regulatory system that "remains hopelessly inadequate."

"If there was a watchdog on duty, it did not bark," Dodd said, outlining reforms.

The packages' highlights include the creation of a consumer protection agency and a powerful committee to monitor systemic risks caused by large firms.

The bill would also clamp down on risky investment instruments, which fueled the crisis, and give shareholders a say on big executive bonuses.
 
Dodd warned that any efforts to delay reform invited calamity.

"Neither I nor anyone else can tell you with any degree of certainty that the American economy could survive another crisis of this magnitude," he said.

But the reforms have been the subject of fierce lobbying in Washington, with some of the city's biggest political hitters involved in tussles over what the rules should be, and who should enforce them.

Dodd's decision to house the consumer protection agency at the Federal Reserve was met with barely concealed fury by some of his Democratic colleagues who accused him rewarding a watchdog that failed miserably to prevent the worst financial crisis in decades.

In a bid to address some of those criticisms, Dodd said the agency would be headed by a director appointed by Obama, and would have the power to write rules governing all financial entities.

Remember, the Republicans wanted no financial protection agency at all.  In fact, short of Ron Paul, they don't  think the banks did anything wrong to justify new rules to begin with.  No, it's not a perfect bill or even a very good one, but it sure as hell is better than the nothing we have now.  Dodd finally realized that there's no winning argument here defending the banksters.

Now it's time to watch the Republicans squirm and go on TV saying there's no need to regulate the industry that lost us trillions of dollars and then demanded you and I pay for it.