For every agency or industry participant that appeared to gain in the bill, there was a downside, while those who arguably emerged bruised and battered after the epic deliberations narrowly avoided an even worse fate.
The Federal Reserve Board, for example, which will gain a host of new powers, now faces a task that many would consider impossible: preventing the next crisis. Meanwhile, the largest banks, which were the targets of just about every provision of the legislation including a tax added in the final hours of debate, escaped the harshest measures designed to cripple or break them up.
"You could look at the list, and even if you're included on the winner side of the column, you would find that there are issues where even a winner had a very significant loss," said Ray Gustini, a partner at Nixon Peabody.
Still, some players finished far ahead of others. The Fed began the reform process as the whipping boy for the financial crisis, and faced a serious effort to strip it of its banking supervisory authority, only to emerge at the end with systemic-risk oversight and power over interchange rates for debit cards.
The Federal Deposit Insurance Corp., too, won battles for resolution powers over large, systemically important firms and long-sought capital restrictions.
Community banks also ended mostly in the plus column, exempted from enforcement by the new consumer protection agency and many of the other restrictions in the bill, while larger banks face new curbs on trading and derivatives activities.
"The money-center banks came out perhaps the worst in this legislation," said Douglas Landy, a partner at Allen & Overy. "They have significantly higher regulatory standards, both prudential and quantitative, and their business model is really being questioned."
But everyone took their lumps, and observers said large banks avoided what could have been a more rapid transformation of their structure similar to the reforms made under the Glass-Steagall Act after the Great Depression.
"Nobody has done anything to break up the big banks," said Roberta Karmel, a former Securities and Exchange commissioner and now a professor at Brooklyn Law School. "The big banks were winners whether they know it or not. Everybody likes to say … small banks are so important for capital formation. But in the end, the big financial institutions won out."
Perhaps as a result, large bank stocks mostly traded higher on Friday despite several new restrictions added as part of the reform bill.
And even though the FDIC and community banks came out stronger, they lost crucial battles. The agency at one point seemed likely to become the federal overseer of all state-chartered banks and to gain oversight of some holding companies, yet the Fed retained authority over that sector. The FDIC did gain backup authority over holding companies, similar to its backup authority over banks.
The FDIC also failed to get lawmakers to create a resolution fund to help it unwind a systemically vital firm. The Houses passed the measure, but it was not adopted by the Senate or the conference committee.
"The elimination of a prefunded systemic resolution fund, which the industry would have to fund, to me is a huge win for the 'too big to fail' players, and a huge loss for the FDIC and taxpayers," said Arthur Wilmarth, a George Washington University law professor. "That is the first provision that the industry focused on in terms of getting it out of the House bill."
