“It’s becoming an annual tradition: Spring rolls around, and while nobody is looking, Wall Street quietly lays siege to Washington and reaches a hand out to yank the last remaining teeth out of the government’s financial regulatory head.

“In the last two weeks, we’ve seen two major developments here. There was a wave of deregulatory bills that snuck through the House with surprisingly bipartisan support, and a series of regulatory decisions by the Commodity Futures Trading Commission that will seriously weaken the already-weak Dodd-Frank reform legislation, particularly with regard to derivatives trades.

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“This past week, the CFTC released a series of new rules governing the swaps business. The rules are highly technical and basically unintelligible to people who don’t work in these markets. But there are some basic concepts that can be understood.

“To backtrack a little, the aim of reformers going into the Dodd-Frank debates was to do what FDR did with stocks after the crash of 1929: put them on open exchanges. That reform worked and has made the stock market a safe, thriving financial arena ever since. Today, when you go to buy a share of IBM stock, anyone can see what the price is, and there’s constant data on bids and offers being that is made available to anyone who wants to participate.

“But in the existing “over the counter” market for derivatives, the whole thing is a black box. There’s no exchange where you can see with the price of this or that interest rate swap or credit default swap is.

“‘It’s basically just a bunch of people on the telephone,’ is how Dennis Kelleher of Better Markets puts it. And when the five biggest banks control most of the derivatives market, the potential is there for all sorts of abuses.”

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Read Matt Taibbi’s full Rolling Stone article here