Washington's Blog has an important blog today. I completely agree with his analysis. Here is the conclusion:
Do you get it?
Instead of "blowing up or burning" over-the-counter CDS -
as nobel economist Myron Scholes urged - or making any other real changes which would help the economy and the consumer, the rule changes are mainly a p.r. effort by the derivatives industry itself (like the stress tests were a p.r stunt by the banking industry.) The "changes" will do virtually everything the derivatives industry asked for, including guaranteeing the big banks' profits in selling CDS by keeping out smaller competitors.
Regulation of over the counter CDS has already failed