It may be impossible to banish greed, ignorance and dishonesty from the financial markets, but the reforms awaiting debate in the Senate are a good starting point in the effort to make the system less vulnerable to these flaws.

The question is whether Republicans will allow financial reforms to be considered. The case for reform was strengthened last week when fraud charges were filed against Goldman Sachs.

It seems a good example of how the deck can be stacked against the ordinary investors. Low grade mortgages were bundled into securities that Goldman sold to its customers. Goldman’s partner reportedly selected these low-grade mortgages and then used financial derivatives to bet against them, but Goldman didn’t disclose this fact. There may be a strong argument that it had no duty to reveal this double-dealing, but that’s why financial reform is needed.

The Senate bill would require that almost all financial derivatives be traded on public exchanges. This requirement, combined with regulatory oversight, would help create a level playing field for investors. The comprehensive bill has other much-needed provisions, including a proposal to establish a financial consumer protection agency to watch out for the interests of customers and borrowers.

The bill also seeks to establish a solution to the “too big to fail” scenario that led to last year’s bailouts of major investment banks. Republican critics characterize this provision as a promise of future bailouts, but its intent seems to be just the opposite.

There may be other good strategies for strengthening our financial system, but unless we begin work on reform, we will be left with the same arrangement that failed us in 2008. The bill could be considered as early as next week, if any Republicans are willing.

— Questions? Comments? Contact Managing Editor Nick Cowenhoven at nickc@journaltribune.com.