WASHINGTON – It’s been almost 80 years since the federal government has reached as deeply into the financial markets as it will do when the regulatory overhaul being crafted in Congress becomes law.

Few historians, market participants or former regulators say they expect the current bill to put an end to financial crises any more than the post-Depression rules did. In one major area, the new legislation is weaker because it departs from a central goal of 1930s lawmakers — to control the size and scope of the largest financial institutions.

The Glass-Steagall Act, which separated commercial and investment banking in 1933, “was the most effective antitrust law we’ve ever had,” said Charles Geisst, a finance professor at Manhattan College in New York, who has written about Wall Street’s history.

Glass-Steagall was as much about breaking up companies as ensuring that customer deposits wouldn’t be used for risky practices, Geisst said. Today’s Congress may live to regret that it’s done almost nothing to shrink firms such as JPMorgan Chase, Goldman Sachs and Citigroup, he said.

In the current debate, people are buying the lobbyists’ argument that “you just can’t live without a series of powerful banks that are all too big to fail,” Geisst said.

Government regulation of Wall Street began in earnest after the 1929 stock market crash, when Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934. The legislation created the Securities and Exchange Commission, required investment banks to disclose information about securities they peddled and prohibited brokers from deceiving clients. The laws responded to abuses that were rampant in the 1920s, such as banks selling stocks and bonds in companies that were already bankrupt.

Congress repealed Glass-Steagall in 1999, contributing to mergers and the growth of “one-stop shopping” financial services companies.

The repeal helped pave the way for the formation of Citigroup by the $46 billion merger of Citicorp and Travelers Group.

It also made it possible for Goldman Sachs and Morgan Stanley, the two biggest U.S. securities firms, to convert into bank holding companies, enabling them to get cheap funding from the Federal Reserve during the financial crisis.

If the law hadn’t been repealed, Bank of America wouldn’t have been allowed to acquire Merrill Lynch.

Under Glass-Steagall, the financial system didn’t approach a meltdown. The law also didn’t prevent government rescues when banks failed.

The biggest collapse before the 2008 crisis occurred in 1984, when Continental Illinois National Bank and Trust became insolvent, prompting the Federal Deposit Insurance Corp. to buy $4.5 billion of its bad loans. The savings-and-loan crisis of the 1980s and 1990s cost the taxpayers about $124 billion.

The legislation passed May 20 by the Senate and the measure passed by the House in December arose amid public outrage over the $700 billion federal bailout of the financial markets in 2008. The bills emphasize the role of regulators and rules in constraining abusive practices.

The bills would create a new agency to oversee consumer financial products, establish a council to monitor systemic risk, and increase regulation of derivatives, mortgage brokers, credit-rating companies and hedge funds.

Derivatives are contracts whose value is derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in interest rates or weather.

Although it is unlikely to prevent future crises, the congressional bill, with all its weaknesses and loopholes, probably will mitigate the impact of the next blow-up, said Harvey Goldschmid, a former SEC commissioner who is a professor at Columbia Law School.

“Undoubtedly there will be further problems — it’s just the nature of business and the financial business in particular,” Goldschmid said. “But this will avoid some significant problems and limit the impact of others.”

Goldschmid, who served on the SEC as it implemented an overhaul of corporate accounting in 2002 and 2003, the Sarbanes-Oxley Act, said the new bill will have a large impact on the way Wall Street works, increasing scrutiny of the biggest banks.

“You’re going to create oversight in areas where we just haven’t had it and in areas that have been part of the problem,” he said. “Will it make it perfect? Of course not. Will it make it better? Definitely.”

Others, particularly banks and their lobbyists, see a historic overreaching by Congress that has the potential to stifle the economy for years to come.

“We’re beginning to see people price in the impact of this on the entire financial system, on the availability of credit,” said David Hirschmann, president of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness. “There are estimates that range up to $2 trillion of credit that would be sucked out of the economy.”

William Sweet, a former attorney at the Federal Reserve Board, disagrees. Assuming that some of the measure’s more contentious aspects get changed in a House-Senate conference — including a requirement that banks wall off their swaps-trading desks and another that directs higher capital requirements — the legislation isn’t likely to be as disruptive as the 1930s changes, he said.

“This gives the regulators more authority to be more vigilant, it gives them new tools and powers, but doesn’t do anything like Glass-Steagall,” Sweet said. “While this is a political response to a similar situation, it avoids doing too much damage.”