A retired Iowa State University economist says the bill being debated in the U.S. Senate that establishes new regulations for the financial industry is “long overdue.” Economist Neil Harl has served on six federal advisory committees, including a panel which was abolished in 1995 amid a wave of deregulation.

Harl says if he were writing the senate bill, he would have “gone a little bit farther” in regulating financial instruments called derivatives. “This has been a mischievous concept. It has some benefits but it almost wrecked the economy and so we have to get that under control,” Harl ways. “…I have been very supportive of enhanced regulation. I was terribly disappointed what I saw unfolding over the last 20 years — the move toward deregulation — because I felt confident we were going to have serious problems down the road.”

The senate bill calls for creation of a consumer protection agency. Republicans charge the new agency would have too much regulatory power, but Harl says he doesn’t share that fear. “I think in general this is going to be a positive move. Almost always when we have a crisis in this country, we overreact. We go a little too far, but then we pull back and we eventually get something just about right,” Harl says. “When the SEC was created, for example, there was the same kind of argument.”

Harl says his greatest worry is that complaints about the bill will prevent its passage. According to Harl, financial reform is the “most critical issue” facing congress today. Harl says it may be time to consider breaking up some of the huge companies that have come to dominate the financial sector.

“Breaking up Goldman Sacs, maybe a couple of others as well,” Harl says. “I think to where they have gotten to be a threat to the long-term healthy of the economy.” Harl argues there’s a lack of competition for those big companies. The government stepped in to break up companies like Standard Oil and AT&T which critics argued had gained a monopoly hold that prevented competitors from entering those industries.

Harl made his comments during a recent appearance on the Iowa Public Television program, “Iowa Press.”