Michael Lewis On Why Financial Reform Hasn't Happened Yet

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At the Columbia Journalism Review, the always excellent Ryan Chittum uncovers some buried nuggets in last night's "60 Minutes" interview with Michael Lewis.

Near the end of the interview, Lewis is truly puzzled about why financial reform hasn't happened yet. "There are several things that obviously should be done that have not been done, and you can't explain to my mother why they haven't been done. Only a really smart person on Wall Street can explain why they haven't been done," Lewis notes.

Unfortunately, the massive trillion-dollar unregulated derivatives market has yet to be affected by a meaningful reform measure. And, Dealbook suggests, Dodd's final bill is still a "work in progress" with regard to derivatives.

As for Lewis, like many critics of derivatives, he's adamant that they should be central to any true financial reform bill. (By way of background, reformers, including CFTC head Gary Gensler, have called for derivatives to be traded on exchanges and clearinghouses and have asked for higher collateral requirements, but lawmakers have yet to act.)

Here's Lewis:

"... insurance contracts not classified as insurance. This market is the closest thing to sort of ground zero of the recent calamity, and yet nothing has been done to change the market. Nothing's been done to make it more transparent. Nothing's been done to make it more like what it is--an insurance market."

(Check out the entire piece at CJR here.)

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