Victory

FT: "Some senior Wall Street figures are now warning that, if the industry does not swiftly act to tackle this counterparty risk issue via the creation of a clearing house or other mechanisms, it could be forced to accept higher regulation %u2013 or shift its activity into an exchange."

Three hours prior, unrelated posting on bigthink.com you will find:

Ben Fisher: "They could have easily instituted a regulatory regime, beyond mere paper records, for the OTC Derivatives market. Such a regime would have included close risk monitoring(I say this but the Fed clearly understood some risks in credit derivatives when they stepped in and started regulating it by mandating paper records), and people from the Fed even started warning about the interconnectedness of their securities and their sheer size, and thus the panic their implosion would cause. I think they should have started planning for an asset backed receivables exchange, like the new exchange being built in New Orleans. The best remedy however would have been a third party intermediary able to judge the credit worthiness of each party to adhere to the derivative contracts being traded. This would have had a similar effect as price controls, I believe, because if a CDS contract requires that one party pay up one billion if X company goes default, which is a somewhat normal number, well that is just ridiculous - but these kinds of risks were being taken."

Called it.