Whale trade, proponents of stiffer regulation on Wall Street than what was ushered in with Dodd-Frank have offered a variety of solutions, including reenacting Glass Steagal or making banks smaller. All of them could be beneficial in tandem to reduce risk and political influence from the financial system.

All four key areas identified by Mike Konczal of the Roosevelt Institute are under attack from the finance lobby. All four are crucial to get us closer to a safe and working banking system. Negotiations continue throughout the weekend.

Though the New York Times’ Joe Nocera may be off on point on changes to credit rating agencies, the overall thrust of his article is quite correct. Nocera, like many reformers, is a structuralist, believing that the very structure of Wall Street is at issue, not the way it gets regulated. And therefore, he would naturally look at what passed the Senate and say that it comes up far short.

Barney Frank announced his conferees for the Wall Street reform bill Wednesday, and he made the important point that the focus on the specific names is a little misplaced. The views of the leadership, and the White House, and what can garner the requisite votes, will factor into the ultimate decisions as much as the specific conferees involved. Frank called his conferees “the agents of collective decision-making than autonomous deciders.”

With both houses of Congress now having passed a Wall Street reform bill, the action now moves to the conference committee. There, House and Senate negotiators will work to finalize a bill with new regulations for the financial services industry, and report back for a final Congressional vote. Here’s a run-down of items in contention.

Dodd seems to think that the discretionary threat of dissolution will act as a deterrent to bankers to staying within the lines of size and particularly risk. Tim Geithner basically said the same thing on Good Morning America today. While he acknowledged the danger in having the six largest banks control 63% of all assets, he focused far more on what would happen “in the future” if they treated those assets like a stake at a casino again.

The bill would place a cap on any financial institution, limiting their total assets to 3% of GDP (that would lower to 2% for banks, as opposed to 3% for non-bank institutions). Currently, the 6 largest banks have holdings that equal 63% of GDP. The Safe Banking Act would also impose a 10% cap on any bank holding company’s share of insured deposits. Bank holding companies and “selected nonbank financial institutions” would have a leverage limit of 6%, meaning that they would not be able to lend out more than around sixteen dollars for every dollar of capital in house.

Well, this is EXACTLY WHAT PEOPLE WHO FAVOR REGULATING BANK SIZE HAVE BEEN SAYING. The non-financial bloggers in the wonkosphere seem to be constructing the mother of all straw men, arguing that those who want to break up the banks think that alone can solve the systemic problems at the root of the financial sector. Nobody I’ve read has been saying that. They all favor a both/and approach, including things like, well, derivative reform, and stronger regulations on shadow banking, and ending the accounting tricks, and even leverage and capital requirements. I don’t see the two sides in this debate at all in disagreement, other than what reforms they choose to emphasize. But there’s sure a lot of misunderstanding and misinterpreting at work. Maybe it’s because those making these arguments know them to be theoretical, as the likely outcome will probably be pathetic on all counts, with Democrats happier to get a “win” than anything fundamentally shaking up the system. Maybe everyone’s staking out higher ground.

You can tell that financial reform will be the next heavy lift in Washington because everyone’s chattering about it today, and proposing a variety of solutions. But they actually come down to something a lot simpler than what’s being proposed: regulators need a few clear rules, and they need to do their jobs.