Former Federal Reserve chairman Alan Greenspan says the proposals now before Congress to overhaul financial regulation would weaken the Fed.

“My basic problem is that people don’t understand how important … the Federal banks in the districts are to the functioning of monetary policy supervision and regulation,” Greenspan says.

Greenspan says he’s concerned that if the Fed loses that aspect of its structure, the original idea of having federal banks throughout the country, rather than having one central bank on Wall Street, will be lost.

“What is in the bills, in my judgment, reverses that,” he told Bloomberg.

Greenspan believes the jobless rate will remain about the same, at just below 10 percent, for the duration of this year.

“You’re going to get a significant rise in employment,” he says, but new workers entering the labor force will modify the effect of employment increases.

As far as the overall economy goes, Greenspan appears pessimistic. “I’m very much concerned about the fiscal situation,” he says. “A billion dollars isn’t what it used to be.”

The financial reform bill that passed the House last December is far too weak on all of the key issues, says Robert Kuttner, co-founder of The American Prospect, in part because gigantic banking conglomerates will remain “too big to fail."

“There is no separation of commercial banking from investment banking or proprietary trading, nor meaningful reform of corrupted credit rating agencies,” Kuttner writes in The Huffington Post.

“The next generation of bubbles is already incubating while we are still recovering from the damage of the previous one.”