The Senate passed the Dodd-Frank financial reform bill this afternoon, and will now go to President Obama for signing. David Indiviglio at the Atlantic has a good round-up of what’s in it (a lot). And also what’s not:
Capital Requirements: Although the legislation urges the new systemic risk council to establish higher capital requirements for banks, a specific new floor is not provided.
Leverage: The House bill would have limited bank leverage to 15 to one. The final bill does not. So unless the systemic risk council decides to impose such a requirement, the culture of high bank leverage will continue.
No Break Ups: Many believe that part of the systemic risk problem was created by allowing financial institutions to grow too large. This bill wouldn’t explicitly require any to be broken up, though the council may be able to do so under certain circumstances.
GSEs: Fannie Mae and Freddie Mac are largely considered a major cause of the housing bubble and are the biggest of bailout recipients. Yet the bill does not create new rules or changes for these firms.
Scott Brown, Olympia Snowe, and Susan Collins voted for the bill. All other Republicans voted against it. Russell Feingold voted against it.