Five years ago, the Lehman Brothers collapse launched a banking crisis that exposed excesses and irresponsibility in the financial industry.
Despite Washington's response, which included the Dodd-Frank reform bill, many of the regulations it envisioned aren't in place yet, and some question whether the effort will do enough to prevent future collapses.
Congress left it up to regulators to flesh out the bill's provisions, and the process has become bogged down in a kind of lobbyist feeding frenzy. In an appearance on CNBC this summer, Treasury Secretary Jacob Lew seemed to acknowledge how long reform has taken.
"If we get to the end of this year and we cannot, with an honest straight face, say we've ended [the concept that giant financial firms are too big to fail], we're going to have to look at other options," Lew said.
Banks are considered safer since the collapse, but that also means they are bigger, with a new set of challenges.
"Left unsaid is the uncomfortable fact that the bank takeovers engineered by [former U.S. Treasury Secretary Henry Paulson] and other government officials during the crisis, because they had no choice, have left the survivors bigger and more powerful than ever — and thus even less likely to be allowed to collapse without a bailout," wrote John Cassidy for The New Yorker. "An industry that was once greatly scattered is now dominated by six behemoths: Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo."
In The Washington Post, Allan Sloan said the Lehman side-effects leave the country ill-prepared for the next financial crisis.
"We've gravely weakened the ability of the Federal Reserve by taking away key powers that it had used to stabilize things," he wrote. "That's bad. Really bad. This problem, combined with the unhappy fact that much of the rest of the federal government is dysfunctional, will cost us dearly when the next financial crisis hits. And there always is a next one."
LEARN MORE ABOUT THE FINANCIAL INDUSTRY AFTER LEHMAN BROTHERS:
• 2008 to 2013: Crisis, Recovery, and Change
Starting with the day Lehman Brothers collapsed, Bloomberg Businessweek examines the financial crisis as it affected the lives of the people who created it, tried to stave it off, protested it, profited from it, and lost everything to it. (Bloomberg BusinessWeek)
• To Recount the Financial Implosion, a Magazine Turns to Film
In the film, Mr. Paulson acknowledges that some of the fixes, including further consolidation in the banking industry and the growth of government as the primary insurer of mortgages, may sow the seeds of the next crisis, which he sees as "unavoidable" in a free market. But the documentary did give Mr. Paulson the opportunity to strike back at the Wall Street banks that took bailout money, failed to make loans, but paid their leaders huge bonuses. (New York Times)