In spite of ruining the economy with toxic instruments that few understood, and even fewer saw traded, the financial institutions who helped wreck our economy are lobbying Congress hard to keep things as they were.
In this NY Times' article, "Even in Crisis Banks Dig in for Battle Against Regulation," Gretchen Morgenson explains how the financial institutions are fighting so that they can keep on trading Credit Default Swaps (CDS) with few oversights. In a few words CDS are insurance contracts that must be paid out once the insured product fails to perform. For example, if you have a group of "insured" mortgage contracts bunched together (a security) that go under because people are no longer making payments on their homes (a default) whoever provided insurance on the mortgage contracts are supposed to pay out.
The companies who wrote CDS contracts before the meltdown - AIG, Merrill Lynch, and Citigroup, among others - wrote so many contracts that when the market collapsed they couldn't pay out the insurance policy (today, the CDS market insures transactions with a face value of $600 trillion). In essence, the banks only wanted the monthly payments that came from the "insured" parties but never intended on paying on the insurance policy when things got bad.
The banks and other financial institutions were able to write so many insurance contracts because they were unregulated. Put another way, no one was watching them as they wrote contracts that they couldn't cover, and would not honor. This is the world the banks want to see continued.
Treasury Secretary Tim Geithner wants to help the banking industry along by allowing them to continue operating in secret by calling for greater oversight while, incredibly enough, he also pushes for the Mother of All Loopholes - allowing a category of "customized" CDS contracts to continue operating in the dark.
When asked by Sen. Tom Harkin (D-Iowa) to define a "customized" swap Tim Geithner's response was stunningly pathetic. He told Sen. Harkin he would have to get back to him.
As an aside ... The real travesty here was that the prospect of CDS "insurance" down the road encouraged the knuckleheads who were writing NINJA (No Income, No Job, No Assets) and other unrealistic mortgages to continue issuing these kind of loan contracts. And why not? The contracts would be "insured," right?