“Three years after the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, it’s time to be honest about financial-sector reform: It hasn’t gone well. (If you doubt this, read these articles by former U.S. Senator Ted Kaufman.)

“Specifically, three issues have become abundantly clear. First, there was insufficient commitment in the original reform effort to end the core problem of “too big to fail” financial institutions. Second, senior leadership at the Treasury Department and other officials became comfortable with the glacial pace of implementation. Third, weak intent and official foot-dragging created fertile ground for lobbying, which further allowed the megabanks to slow the detailed rule-writing. At present, reform is on a trajectory to do too little, too late with regard to addressing the next crisis.

“Last week, Treasury Secretary Jack Lew promised to cut through this Gordian knot. It’s an uphill battle, but if Lew applies himself, he could make a real difference in changing the way the financial system operates.

“Under Dodd-Frank, the Treasury secretary has a central role in financial regulation. While previous secretaries led a working group on capital markets and had the potential to exercise moral leadership on financial issues, most just let these issues slide. But Dodd-Frank created a Financial Stability Oversight Council and made the Treasury secretary its chairman.”

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Read Simon Johnson’s full Bloomberg View column here