What’s the future for much-maligned derivatives?

Of course, the derivatives market can't be reformed until the markets for the assets underlying them are cleaned up. In the case of subprime mortgages, for example, some were issued fraudulently to new homeowners who clearly couldn't afford to pay back their loans.

The excesses in derivatives markets merely reflected the excesses in the financial system as a whole. Those excesses will soon be a thing of the past.