Obama's window dressing US financial reforms Bill falls short of original aim

US President Barack Obama has signed into law the US Financial Reforms Bill. The debate on the Bill has been going on for quite some time now and, as usually happens in such politically charged debates, the original purpose and objective of the Bill has gotten lost in various compromises. It was important for Obama to keep his promise of financial reforms and so he came forward with an Act that introduces some reforms. Unfortunately, as is the case in most democracies with less-than-strong and visionary leadership, what one ends up with is very different from what one started with. For example, the Act does nothing to restrict the size of banks, a major objective of the original reform proposal. Admittedly, while the US could regulate the size of its own banks, it could do very little to cap the size of foreign banks. Since the US and foreign banks operate in the same global and national space, it is difficult to restrict the size of US banks if they are to compete with their bigger foreign counterparts. This once again highlights the necessity to coordinate financial market reforms across countries, something the emerging countries have been aware of ever since they were hit by the crisis they did not bring upon themselves.