The United States Congress has enacting “the toughest financial reform since the one we created in the aftermath of the Great Depression,” said President Barack Obama on Friday. The sprawling legislation promises transparency and oversight while providing government with new tools that it can use to liquidate failing firms.

In spite of calls to break up banks from the left, the bill drafted by Senator Christopher Dodd and Congressman Barney Frank of Connecticut and Massachusetts respectively actually does not end “too big to fail.” Banks are restricted in proprietary trading activities and forced to renounce their swaps desks to become separately capitalized operations but the largest part of their derivatives business is left untouched: between 80 and 90 percent of those activities are expected to remain within the banks and the five largest of them — Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley — control over 95 percent of that market, or close to $200 trillion.

In spite of all the rhetoric and the legislative witch hunt which lawmakers persued after they themselves agreed to bail out banks deemed so vital to the American economy that the very notion of their collapse might trigger a panic, they are now set to make those very Wall Street firms wrongly blamed for causing the crisis stronger by imposing capital charges that will make it more difficult for new banks to enter the playing field. In the words of one former Treasury Department official quoted by Newsweek, “they’ve created six new GSEs,” or government-sponsored entities like Fannie Mae and Freddie Mac, also counting Wells Fargo.

Yet those institutions, which were instrumental to inflating the housing bubble, driving down interest rates and played a key role in the Bush Administration’s “compassionate conservative” policy of promoting homeownership, are wholy absent from this new legislation.

The reform bill would erect a new consumer protection regulator within the Federal Reserve — an arrangement Congressman Frank previously described as a “bad joke” but now, apparently, can live with. The agency would be authorized to regulate mortgages, credit card policies and consumer loans with a budget of its own, separate from the congressional appropriations process.

Government will be granted additional powers to regulate Wall Street and break up failing corporations. In order to pay for the new programs, Washington will be allowed to charge fees to large banks and hedge funds to raise up to $19 billion spread over five years. All “large” banks are effectively expected to bear the burden of a fund that is designed to help out one of more of their competitors in the event of a near bankruptcy. If the money hasn’t to be used for that purpose, lawmakers are suggesting that it can pay down part of the national debt.

Democrats have hailed the legislation as a step toward preventing the sort of financial collapse witnessed two years ago. President Obama has urged Congress to deliver the bill for his signature without delay. Republicans almost unanimously oppose it. They warn of unintended consequences and fear that it might crimp financial markets and access to credit.