Can someone please explain what Timothy Geithner really thinks about Wall Street? Today we get completely mixed messages from the Treasury about financial reform.

One the one hand, The New York Post and Bloomberg reported that the Treasury has succeeded in getting the White House to drop the so-called Volcker Rule, the proposal that is named after the administration's chief proponent, Obama advisor and former Fed chairman Paul Volcker, and would force banks that get deposit insurance to shed their proprietary trading operations and other speculative businesses.

Simon Johnson points out today that Goldman Sachs' contention that it has nothing to apologize for after helping Greece mask its debt for purposes of gaming the European Union's financial rules pokes a hole in yet another shibboleth about the virtues of unregulated finance. And that is the laughable notion that the fear of damage to one's reputation makes self-regulation work and government oversight unnecessary.

Sorry to toot my own horn here (and to link to this article of mine for the umpteenth time), but I made the same point several years ago when I discussed the doubts harbored about the efficacy of this reasoning by Richard Portes of the London Business School.

Whether a Treasury-led council of bank regulators would be more or less effective at heading off systemic financial risk than the current set-up remains to be seen.

But it couldn't be much worse. So the nonsense that St. Louis Fed President James Bullard told the Times today about the Fed's role in the financial crisis needs to be called just that.

The increasing scrutiny of the swaps that Goldman Sachs arranged to help Greece hide its debt shows once again why investment banking should not be subsidized by taxpayers.

Yes, the separation of commercial and investment banking imposed by Glass-Steagall with that in mind may seem antiquated, and it may not have prevented the financial crisis. Surely it would have had no bearing on what happened in Greece. And neither would the Volcker Rule, which doesn't even go far enough in terms of the U.S.

The securitization of Greek debt arranged by Goldman Sachs is hardly a new development in modern finance.

In fact, it looks a lot like some of the deals that Enron arranged with the help of investment banks, only the Greek currency swaps seem to have played the rules.

Contrary to press reports , the choice that the Volcker Rule presents to Goldman Sachs may not be very stark.

It's one thing to give up a license as a depositary institution, which provides FDIC insurance that Goldman cares little about. It's quite another to relinquish its status as a financial holding company, which allows Goldman to benefit from taxpayer assistance through the Fed instead of the FDIC if it runs into trouble.

The back and forth over President Obama's "praise," or whatever you want to call it, for Jamie Dimon and Lloyd Blankfein via an out of context Bloomberg take is really overdone.

Worse, it misses the fact that Larry Summers seems to have (emphasis on "seems") a road to Damascus moment.

This paper published last Sunday at voxeu.org makes a worthwhile suggestion that would improve President Obama's proposed tax on banks too big to fail.

Rather than indiscriminately tax all uninsured liabilities of banks of a certain size, as Obama's proposed levy would do, the tax proposed by Enrico Perotti, a professor of international finance at the Amsterdan Business School, would fall on short-term ones, thereby reducing banks' leverage and improving their liquidity.

We've obviously got Bank of America on the brain around here, but the case raises one more issue that I don't think we or anyone else has fully addressed.

Charles Gasparino hints at it when he points out that Ken Lewis is likely to call Ben Bernanke and Hank Paulson to testify on his behalf.

Chris Dodd's scolding of the Obama administration on Tuesday for wanting to do "too much" to restore banking regulation sent me into a short trance and a vision of the future: Dodd as banking lobbyist.

Here's the Dodd quote if you don't believe it: "I don't want to be in a position where we end up doing nothing because we tried to do too much."