New Financial Rules Might Not Prevent Next Crisis

The most sweeping changes to financial rules since the Great Depression might not prevent another crisis.

Experts say the financial regulatory bill approved by the Senate last week, and a similar bill that passed the House, include loopholes and gaps that weaken their impact. Many provisions depend on the effectiveness of regulatory agencies — the same agencies that failed to foresee the last crisis.

A big reason for the bill's limitations is that banks and industry groups lobbied against rules they felt would reduce their profit-making ability.

The financial sector's influence in Washington reflects its enormous donations and lobbying. Over the past two decades, it's given $2.3 billion to federal candidates. It's outdone every other industry in lobbying since 1998, having spent $3.8 billion.

Here's how the bills, which must be reconciled and approved by the full Congress, might address some causes of the financial crisis, and some of the bill's perceived weaknesses: