A leading credit default swap expert (Satyajit Das) says that the new credit default swap regulations not only won't help stabilize the economy, they might actually help to destabilize it.
Senator Cantwell says that the new derivatives legislation is weaker than current regulation
Now, Mike Konzkal points out that the new derivatives bill may be completed gutted, and that Congress might not even realize it:
Have lobbyists snuck another major loophole into the OTC Derivatives bill? This week the final touches are being put on Barney Frank's financial regulation bill – H.R. 4173 - "Wall Street Reform and Consumer Protection Act of 2009." One of the centerpieces of this reform is Title III: Over-the-Counter Derivatives Markets Act. And one of the goals of this reform would be to get as many derivatives as possible to trade on exchanges...
For a while, reformers have been worried about an "alternative swap execution facility." This would be a way of essentially allowing the current way things are done to be allowed to count as an exchange. Fighting off this loophole was a battle from a month ago, and it had appeared to be won. Nowmany are worried that this language appears to have snuck back into the final bill now.