The Myth of Financial Reform

Five years after the crisis, growth is back, but risks remain. What's needed to finish the job and keep your money safe

Photo-illustration by Ji Lee for TIME. Photographs from Getty Images. Bull: Jan Cobb Photography. Confetti(2): Brian Hagiwara, Lauren Nicole

Five years on from the financial crisis, the disaster that was Lehman Brothers can seem a distant memory. We're out of the Great Recession, and growth is finally back. But amid all the backslapping, a larger truth is being lost. The biggest banks in the country are larger and more powerful than they were before the crisis, and finance is a greater percentage of our economy than ever.

Given all this, is your money really any safer over the long haul than it was five years ago? And have we restructured our financial industry in a way that will truly limit the chances of another crisis? U.S. financial institutions remain free to gamble billions on risky derivatives around the world. A crisis in Europe, for instance, could still potentially devastate a U.S. institution that made a bad bet — and in turn, send shockwaves through the $2.7 trillion held in U.S. moneymarket funds, much of which is owned by Main Street investors.

Although this scenario isn't necessarily probable, it is possible. The truth is, Washington did a great job saving the banking system in '08 and '09 with swift bailouts that averted even worse damage to the economy. But it has done a terrible job of reregulating the financial industry and reconnecting it to the real economy. Here are five things that are still badly needed to reduce the risks for everyone.

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