DERIVATIVES DODGE

In the last major piece of its financial reform campaign, the Obama Administration on Aug. 11 sent legislation to Congress that would regulate the arcane, $450 trillion derivatives industry. The White House aims for the SEC and the Commodity Futures Trading Commission to cooperate in writing rules for derivatives markets and to oversee nonbank dealers, while banking regulators would keep an eye on banks trading the complex instruments. A catfight between the SEC and the CFTC in the 1990s allowed derivatives to remain essentially unregulated right through the financial crisis, but Administration officials decided not to spend the political capital it would take to try to meld the agencies.