http://www.nytimes.com/2008/11/17/bu...pagewanted=all

"And he pushed through a provision that ensured virtually no regulation of
the complex financial instruments known as derivatives, including credit
swaps, contracts that would encourage risky investment practices at Wall
Street's most venerable institutions and spread the risks, like a virus,
around the world."

http://www.gainesville.com/article/2...and-Phil-Gramm

Written with the assistance of financial industry lobbyists, read by few
legislators, and passed without hearings by a lame-duck Congress racing to
finish before recess, Gramm's bill prevented the SEC and the Commodity
Futures Trading Commission (CFTC) from regulating most over-the-counter
derivatives, credit derivatives, and swaps, trading instruments that Warren
Buffet called "financial weapons of mass destruction."

http://howdidthishappen.org/blame/

First, Republican Senator Phil Gramm, an anti-regulation zealot, made sure
that the risky financial products that nearly brought down Wall Street would
be exempt from government regulation by quietly slipping a provision into a
must pass-budget bill in 2000.

http://wapedia.mobi/en/Government_po...ris is?t=4.#4.

The Commodity Futures Modernization Act of 2000 exempted derivatives from
regulation, supervision, trading on established exchanges, and capital
reserve requirements for major participants. Concerns that counterparties to
derivative deals would be unable to pay their obligations caused pervasive
uncertainty during the crisis. Particularly relevant to the crisis are
credit default swaps (CDS), a derivative in which Party A pays Party B what
is essentially an insurance premium, in exchange for payment should Party C
default on its obligations. Warren Buffett famously referred to derivatives
as "financial weapons of mass destruction" in early 2003. [28] [29]