Is Obama Blowing It on Derivatives Reform?  The gaping loophole
in the administration's new financial regs.  | Wed Jun. 17, 2009
12:41 PM GMT  On Wednesday, President Barack Obama released his
proposal (PDF) for regulating the Wild West market of financial
instruments. The proposal includes several tough reforms,
including the creation of a single national banking charter, the
elimination of the weak Office of Thrift Supervision, and new
consumer protection measures. But the administration's plan for
regulating derivatives, which include products like credit
default swaps, which many believe contributed to the financial
meltdown, has a loophole you could drive a truck through.  The
new rules proposed by the White House call for all standardized
derivatives to be traded through a regulated central
counterparty (CCP), a kind of middleman. The Obama
administration also wants to move "the standardized part of
these markets onto regulated exchanges and regulated transparent
electronic trade execution systems." But