The banks have fought their war against financial reform on four fronts.

They have pushed for delays, lobbied allies in Congress to repeal aspects of Dodd-Frank, worked over regulators to make the rules as loose as possible and threatened legal challenges and filed lawsuits.

The battle has been overwhelming, with a scrappy band of pro-reform rebels outnumbered and overpowered by the empire's resources. The public appears to be on the side of the insurgents, but perhaps can't follow or understand debates about whether "swaps" — what are those? — should be "pushed out" or not — what's that? (English translation below.)

During all of these fights, the banks have had a stalwart ally holding back greater reform: Establishment Democrats.

Such Democrats, the Robert E. Rubin wing of the Democratic Party, opposed moves to break up the big banks after the 2008 global crisis. These stalwarts prevented a reinstatement of the Glass-Steagall separation of commercial and investment banking.

Of course, most Republicans opposed such bold moves, but they weren't in control of Congress in the immediate aftermath of the crisis. The lack of sweeping financial reform begins at the top. President Obama did not back such a vision, and his administration has repeatedly put forward nominees with Wall Street connections for major oversight roles.

If the Obama administration had taken a different stance, financial reform would have been stronger. Indeed, the White House actively squelched efforts for broader reform. During the debate over the Dodd-Frank Act, for example, the administration lobbied against an amendment offered by Democratic Sens. Sherrod Brown of Ohio and Ted Kaufman of Delaware to cap the size of banks.

As detailed by "Act of Congress: How America's Essential Institution Works, and How It Doesn't," a 2013 book by the Washington Post reporter Robert G. Kaiser, Dodd-Frank was built mostly on legislation and ideas that were developed before the crisis, not after.

The Obama administration sees it differently, of course. To the president, the law is a signature achievement, capped by the creation of the Consumer Financial Protection Bureau, an entire agency to protect the little guy from financial predators.

All the while, the Obama administration, Sen. Charles E. Schumer, D-N.Y., and the other Rubinite leaders of the Democratic Party could tell themselves a story that they were standing firm against the Visigothic know-nothings of its populist wing.

So that's the story of how the American public got a law of incremental tinkering with existing rules. Dodd-Frank is the Clement Attlee of legislation: a modest law with much to be modest about. This history and context needs to be understood to grasp what is happening now.

Republicans have taken over Congress. Among their early acts has been to deliver for the banks. After splitting their contributions more or less evenly for years, the financial industry switched to favor Republican candidates. In the last two election cycles, 62 percent of finance sector donations in 2014 and 69 percent in 2012 went to Republicans.

Even before Republicans secured control of the Senate, their counterparts in the House attached an amendment to a must-pass budget bill to avert that pesky "swaps push out" that I referred to above.

The arcane phrase refers to a provision in Dodd-Frank that required government-insured banks to "push out" the riskiest derivatives (like metals and energy swaps) into a separately capitalized unit. The idea was to insulate financial institutions from the effects of a volatile transaction gone wrong. In the new year, House Republicans have pushed a series of provisions aimed at gutting financial reform. Excuse me: The proper terminology, according to the Republican supporters, is "technical corrections."

Not only that, but many Democrats support these "fixes." Plenty of moderate Democrats are lily-livered about taking on the banks....

http://www.propublica.org/thetrade/item/obama-stands-at-crossroads-on-financial-reform

As Clinton's two-term Secretary of the Treasury, Rubin sharply opposed any regulation of collateralized debt obligations, credit default swaps and other so-called "derivative" financial instruments which—despite having already created havoc for companies such as Procter & Gamble and Gibson Greetings, and disastrous consequences in 1994 for Orange County, California with its $1.5 billion default and subsequent bankruptcy—were nevertheless becoming the chief engine of profitability for Rubin's former employer Goldman Sachs and other Wall Street firms.[33] When Brooksley Born, head of the Commodity Futures Trading Commission, circulated a letter urging increased regulation of derivatives in line with a 1994 General Accounting Office report, Rubin took the unusual step (for a Secretary of the Treasury) of going public in June 1998 to denounce Born and her proposal, eventually urging that the CFTC be stripped of its regulatory authority.[33]

Rubin sparked controversy in 2001 when he contacted an acquaintance at the U.S. Treasury Department and asked if the department could convince bond-rating agencies not to downgrade the corporate debt of Enron, a debtor of Citigroup. The Treasury official refused. A subsequent congressional staff investigation cleared Rubin of having done anything illegal.[34]

Journalist Robert Scheer, in his book The Great American Stickup, claims the repeal of the Glass–Steagall Act was a key factor in the 2008 financial crisis.[page needed] Enacted just after the 1930s Great Depression, the Glass–Steagall Act separated commercial and investment banking. The law was repealed by Congress in 1999 during the Clinton presidency, while Rubin was Treasury Secretary.

...Upon Rubin's retirement, Clinton called him the "greatest secretary of the Treasury since Alexander Hamilton".

http://en.wikipedia.org/wiki/Robert_Rubin