The American people need a bill that strictly regulates all derivatives -- the complex, and often speculative instruments that caused so much trouble here and abroad.
PETER EDMONSTON nytimes.com/dealbook LOOKING AHEAD Floyd Norris notes that Wall Street will stay sober only until investors are willing to start buying newer versions of the "fancy financial instruments" that caused the problem.
The instruments that caused the greatest disruption last year, credit-default swaps tied to mortgage-backed securities, were traded "over the counter" rather than on exchanges and were almost entirely unregulated.
At the same time, we're learning more about the financial instruments that caused our economic collapse, and it's now clear that "exotic," the adjective of choice, won't suffice.
It is also a comment on the financial instruments that caused the global crisis, some of which strike her as fictions with no more substance than the incantations of levitators.
C.D.S., in shorthand, is the same financial instrument that caused so much trouble at the insurer American International Group, prompting a government bailout to avoid an international chain reaction of bank failures.
Mr. Paulson, 54, was not named as a defendant in the S.E.C. suit, but his role in devising the instrument that caused $1 billion in losses for Goldman's customers is detailed in the complaint.
"In the past, one had to really strive hard to convict somebody of a felony when a dog was the instrument that caused the damage," said Kenneth M. Phillips, a Los Angeles-based lawyer focused on canine law.
