The big news over the next week or two will be the fate of the financial reform bills that must be melded in Congress. Some have decried the reform package as "wimpy," while others have suggested it is a profound effort that will remake Wall Street and banking as we know it--the biggest reform effort since the Great Depression.

Obviously, the truth lies in the middle somewhere. There's a lot of last-minute lobbying underway, but the industry has already been altered. Some have made the decision to exit or de-emphasize alternative investments, and we may see an outflow of talent in these areas from bulge banks to the top firms. Banks are busy boosting capital levels. A new consumer agency seems likely within the Fed. Swaps and credit derivatives will likely have to be traded via clearinghouses and even exchanges and swap execution facilities. The list goes on and on.

The bills together total more than 3,000 pages. The process will begin on Thursday. The bottom line is that we will likely get a bill by July. And the industry may take some lumps. Profits may well be hit--a sign that the reform measure does have some teeth. But you can bet the industry will adapt.

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