We’ve been watching press coverage of regulatory reform closely here at The Audit for several months.

The press has done a pretty good job covering the lobbying pushback by the finance industry, which got up off the mat swinging this summer thanks to trillions of dollars in taxpayer money.

The other day Wall Street Journal story gave an “okay” overview of the prospects for reform and why they’ve dwindled. But even better is BusinessWeek’s story looking at how the proposals will actually work. Don’t get your hopes up.

The likely result? A package of worthy but lukewarm reforms that leave the global financial system—and taxpayers—exposed to another costly bust some years down the road…

International and U.S. proposals on the table target the hot topics: increasing capital requirements, corralling the “shadow banking system” of nonbank lenders, and otherwise trying to ensure that risk doesn’t balloon out of control. But in most cases they rely on the kinds of tools that failed the last time around, when supervisors proved less than vigilant, turf squabbles impeded regulation, and fears of foreign competition led governments to yield to industry demands for a lighter touch.

BW is wise to point out that simply increasing capital requirements is likely to fail—Wall Street will just figure out some new chicanery to get around them, regulators will be lulled into complacency, and there you go. The current mess is in no small part due to the fact that banks got around capital requirements by putting toxic securitized assets in off-balance-sheet entities like structured investment vehicles. In Europe, banks got around capital requirements by buying credit-default coverage from, you guessed it, AIG.

But to reinforce how milquetoast the Obama administration’s proposed reforms are, they wouldn’t prevent banks from taking “government-insured deposits with one hand and, in other subsidiaries, (making) risky bets on the market…” No Glass-Steagall 2.0, in other words. And they don’t propose any way to resolve a failed institution with entities overseas, like, well, any of the big banks.

BW also looks at how lobbying is particularly choking a couple of needed reforms (emphasis mine)

Officials in the Obama Administration also considered consolidating the Securities & Exchange Commission, which oversees the securities market, and the Commodity Futures Trading Commission, which polices futures and commodity markets. But they concluded it would take too much political capital to buck the congressional agriculture and financial committees that split responsibility for the agencies—and that enjoy the campaign contributions that follow the oversight. Now the proposal calls for just one of more than a half-dozen federal financial regulators to disappear.

The Administration’s goal of consolidating all financial consumer protection in a single agency—perhaps its boldest proposal—is running into a buzz saw of bureaucratic infighting and industry lobbying. “Our strategy is to kill it,” says one lobbyist for the financial-services industry.

And just you wait for the upcoming Supreme Court ruling that corporate speech can’t be regulated.

Better get what we can get done now.

Finally, the article end on a Too Big to Fail note: Pointing out how engorged the fattest of the fat-cat banks have gotten:

Meanwhile, the biggest financial firms have only gotten bigger and harder to control. The Economic Policy Institute notes that the four biggest U.S. banks have about 45% of industry assets, up from around 27% in 2003.

Nice work.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.