Derivatives were very much in part what lit the fuse of the financial crisis bomb.
Today, I caught up with Gary Gensler, the Chairman of the Commodities Futures Trading Commission. He was in town for a speech about Financial Regulation, specifically, HIS area: the complicated financial instruments called derivatives.
In an exclusive interview, Gensler told me today that he's identified areas where financial institutions are trading these things but where they need to have way more supervision and collaterol behind the trades.
Remember, it was one single AIG office in London that was dipping its hands into a very poisonous derivatives pie. No one was watching even thought they should have been. Will new government bureaucracy fix that?
Will FinReg, which passed today in the Senate, accomplish what other regulators in the past did not? Time will tell but please listen to my interview with Gensler on this subject which matters to you. It was your tax dollars that bailed out the risk takers. Let's hope THAT doesn't happen again.