The Senate's financial reform bill moved forward this week, and some key battles about the future of bank regulation are now being settled out in the open rather than in back rooms.
It's a process filled with partisan mudslinging as well as Senate-floor votes.
Rep. Ron Paul (R) of Texas blasted Sen. Bernie Sanders (I) of Vermont for having "sold out" on elements of a Federal Reserve audit that both support. And as senators sparred over other proposed amendments to the bill, the White House and congressional Republicans jabbed at one another with dueling lists of "10 loopholes" allegedly supported by the other party.
At this point, the House has already passed a financial reform bill. Sen. Christopher Dodd (D) of Connecticut put his version out on the Senate floor this week, in a bid by Senate leadership to get a reform bill to President Obama for signing within weeks.
If anything, the Senate process has been tilting toward tighter regulation of Wall Street than the banking industry expected just a few weeks ago. But that doesn't mean that every stringent proposal is winning its way into the bill.
"The final bill will be tougher on the banks than the House bill was, because public opinion [about banks] has hardened," predicts Douglas Elliott, a finance expert at the Brookings Institution in Washington.
Here's what's known after this week's key plays in the Senate:
•A Republican bid to weaken a new consumer-protection bureau, to be created by the bill, failed.
•Republicans won bipartisan support to nix a proposed $50 billion fund that, they said, would perpetuate Wall Street's view that large firms will be bailed out in a future crisis.
•Senators balked at one move that would have rattled Wall Street, an amendment proposed by Sherrod Brown (D) of Ohio and Ted Kaufman (D) of Delaware that would have capped the size of banks. The idea behind the measure was that banks shouldn't be allowed to grow "too big to fail."
•Many senators are hoping to remove a provision that entered the bill as a last-minute surprise – a ban on bank trading in derivatives. These complex investments played an important role in the financial crisis. While finance experts generally say some tough restrictions on derivatives are warranted, many worry that an outright ban will simply shift risks from banks to other parts of the financial system.
•A provision to audit the Federal Reserve's books gained steam, although the Senate hasn't voted on it yet. Representative Paul, known as a watch dog of the Fed, complained that the Senate provision would no longer apply to monetary policy as well as to emergency lending activities. Senator Sanders defended his change in the provision, designed to reassure some lawmakers that the Fed will retain its independence from Congress in setting monetary policy.
"There also are provisions in my amendment which are stronger than theirs [in the House]," Sanders said on his website, "including a mandate that the names of financial institutions that received Fed loans, and the precise terms of the loans, will be made public."
Regardless of these or other amendments, basic parameters of the financial reform bill appear likely to remain in place. These include provisions for monitoring systemwide financial risks, imposing new transparency and capital backstops on derivatives trading, and a new "resolution authority" for dealing with large firms that are failing.