When historians look back at today's Great Recession, they will find the roots of the crisis in the failure of regulation.

Investors who thought their money was safe in supervised funds were shocked to discover they had been ripped off by Ponzi schemes run by the likes of Bernie Madoff. Others who put their faith — and their money — in AIG, Bear Stearns and Lehman Brothers lost fortunes because part of Wall Street functioned like a casino while "regulators" looked the other way.

Has Wall Street learned its lesson? Not to judge from current efforts in Washington to restrict, undermine or just plain thwart new efforts at regulation. Apparently not satisfied with the current state of affairs, the same culprits who brought it about are lobbying to stop efforts to strengthen supervision and thus avoid a repetition of this debacle — even as they have accepted bailout funds from the government.

We may not know a credit-default swap from a collaterized debt obligation, but we know gall, and this is a brazen case of it.

The issue is the attempt in Washington to rein in all of these fancy and hard-to-fathom financial instruments like the aforementioned credit-default swaps. These derivatives played a crucial role in taking the economy to the brink of collapse, but they were bought and traded in largely unsupervised operations that yielded huge profits for Wall Street.

Some lawmakers believe that the way to make sure this doesn't happen again is to trade these instruments on an open exchange, just like company stocks. This increases transparency — a synonym for "truth" in an economic context — so that customers know what prevailing prices are and can also measure the risk of investment. Banks want to avoid this at all costs, however, because this would cut into their profits.

Their preferred alternative is a "clearinghouse" process, which by its nature is less open to disclosure, hence easier to manipulate and keep away from the prying eyes of regulators. This amounts to a gigantic loophole in the larger effort to overhaul the way Wall Street does business and should not be allowed to go forward.

Last November, in the depths of the crisis, the nine biggest participants in the derivatives market created a lobbying organization to fight the transparency effort.

These included JP Morgan Chase, Goldman Sachs, Citigroup and Bank of America. They have every right to lobby, but members of Congress have every reason to reject their arguments, especially in light of the damage done to the economy.

It will be hard enough to create a new regulatory system that keeps Wall Street playing by the rules when the rules are clear and straightforward. It will be all but impossible if regulators are kept in the dark.

— The Miami Herald