This morning, Treasury Secretary Hank Paulson unveiled the long-awaited financial regulatory reform proposal of the President's Working Group on Financial Markets, which he heads. President Bush and Secretary Paulson are to be commended for the breadth of this proposal and for its principled and thoughtful approach. Admittedly, the proposal won't do much for the immediate financial crisis, but it would avert some future crises.

Replacing our hodgepodge of overlapping and ineffective financial regulation with a comprehensive, sensible, and lower cost system makes all the sense in the world. Many in the financial markets support these reforms.

However, reforms of this magnitude create winners and losers of just about every financial market firm. Non-depository institutions would be put on a par with banks. Insurance regulation would be imposed uniformly nationwide. The separate regulation of commodities and derivatives would be erased. Mortgage origination would come under special scrutiny. The Fed would get sweeping new powers, including the right to force disclosure of complex derivatives exposure. That's just a few highlights.

The winners are not likely to storm Capitol Hill, but you can bet the losers will. Congress invariably reacts to opposition by slowing down the legislative process, sometimes to a dead stop, and it also waters down the reforms. Broad reforms do not pass Congress quickly. We're talking years here -- at least two and possibly more. Winners and losers fought each other to a draw for 19 years before Congress finally revised the antiquated Glass-Steagall Act in 1999. Hopefully it won't take that long.