US reform law limits banks; will it ease future crises?

The new federal bank reform law is intended to save giant banks, and in some cases their customers, from their own most dangerous impulses.

Smoothed from House and Senate versions a little ahead of schedule last night and cleared for President Obama's signature, the law would limit FDIC-insured and Federal Reserve-backed banks from betting too much on potentially risky investments, increase the government's ability to take apart banks in dangerous financial condition, increase the Fed's power to restrict questionable consumer loan practices, and generally make it harder for banks to engage in the profitable practices at or beyond the margins of traditional savings and lending.

That means higher fees for bank services, and maybe more emphasis on lending to businesses, instead of relying so much on consumers.

Now Congress can get back to ignoring what to do and what not to do about federal housing policy, Fannie Mae, Freddie Mac, until after the November election.

There'll be lots of analysis, scary, trenchant, reassuring, in the weeks to come. Here's some thumbnail descriptions and quick reactions:

Summary from Business Insider/Clusterstock
Summary from Reuters
Bloomberg article here
Wall Street Journal here

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