At The Baseline Scenario, Simon Johnson handicaps the prospects for meaningful financial reform:
With the broader financial picture unchanged - major banks will make lots of money, while unemployment remains sickeningly high – legitimate concerns about the practices of Big Finance continue to build. Small and medium-sized banks find themselves increasingly hit by commercial real estate woes. The alliance that has held back reform begins to crack.
Very few people now claim that serious reform is only proposed by people carrying pitchforks; that myth is long gone. The middle of the consensus has started to move, against mega-banks and against dangerous overborrowing by the financial sector. This will be a long hard slog, but we are finally heading in the right direction