The Coffin For Regulatory Reform Has Been Ordered

The Obama administration had been diddling around with financial regulatory reform for some time. They’ve been making lots of noise about finally rolling something out next week. The response from Congress is go ahead but we don’t have time to deal with it right now.

Senator Chris Dodd said that health care was not the priority and that in all likelihood regulatory reform won’t be addressed until after the August recess. He did indicate that he wants to get a bill to Obama by the end of the year. Since Chris Dodd is conflicted up to his eyeballs in this area I rather suspect that he wouldn’t be at all sorry to see the whole thing wither and die. You can bet he doesn’t want this shaking around in 2010 when he faces a tough election.

Reuters had this from one industry watcher:

“Regulatory reform will center mostly on turf fights and political infighting,” said Jaret Seiberg, financial services policy analyst at research firm Concept Capital.

“The odds are less than one-in-five that a massive financial reform bill will be enacted.”

If past problems such as the savings-and-loan crisis of 1989-1990 could not trigger comprehensive reform, he said, “No crisis is likely to overcome the entrenched interests that favor the status quo. Yet we do believe the odds are north of 75 percent for more limited reform.

“Either way, this fight is going to dominate the headlines through the mid-term election.”

Once again, I just don’t see this fight going on through the mid-term elections. It digs up too many skeletons and Congress isn’t going to be in a mood to bite the hands of some of their biggest donors. It’s this year or never.

The old saying, “you snooze, you lose” couldn’t be more apt. I doubt the administration really ever wanted this fight and I suspect they dozed off on purpose.

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