“Financial reform is stuck. There was sensible intent in the Dodd-Frank legislation of 2010, but the pressure from global megabanks has overwhelmed regulators.

“The only way to remake the system is through renewed and focused impetus from Congress. Today may have marked that moment: Four senators — Republican John McCain, Democrats Elizabeth Warren and Maria Cantwell, and Independent Angus King — have unveiled their “21st century Glass-Steagall Act,” which has potential to protect us from the worst problems in the banking industry while making it a better engine of prosperity.

“The biggest U.S. banks have become too big to manage, too big to regulate, and too big to jail. At a stroke, the proposed law would force global megabanks such as JPMorgan Chase and Bank of America to become smaller and much simpler — divorcing high risk activities from plain-vanilla traditional banking. Their failures would no longer threaten to bring down the economy.

“Naturally, Wall Street will respond with a huge disinformation campaign, saying that the bill would cause the sky to fall. As the debate intensifies, keep in mind the following five points.”

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Read Simon Johnson’s full Bloomberg opinion piece here