Shortening The Tether on Bankers

Congress halts, at least for now, the march to deregulation

Ronald Reagan's dream of carrying out a sweeping deregulation of the U.S. economy has stirred a powerful backlash on Capitol Hill. Never has that been more apparent than last week, when Congress passed its first comprehensive piece of banking legislation since 1982. The White House had hoped the bill would remove many of the governmental shackles that inhibit competition between banks, securities firms and other institutions in the burgeoning field of financial services. In fact, it does just the opposite.

The new legislation reinforces restrictions on the financial industry and adds some new regulatory safeguards to protect the rights of the...