A time capsule:
It's depicted in financial journals as a wild three-headed dragon. One Congressman wonders if it may lead to another savings and loan crisis. Few outside the banking world understand it.
The derivatives industry has an image problem.
This worries bank and brokerage firm executives, who've responded with a detailed campaign to educate members of Congress about the fast-growing market of exotic financial contracts.
That was in an AP article in November 1993. The one member of Congress was the legendary Henry Gonzalez, one of the last great progressive leaders in the House.
I should note that the term "derivative" refers to a whole range of financial instruments that derive their value from underlying assets - essentially bets on the values of those assets - and the credit derivatives that have played such a big role in the recent crisis are one (very large) subset of derivatives.
From what I can tell, mentions of the first credit derivatives, or credit risk derivatives, as they were originally called - in which the underlying asset is a bond - began to appear in the financial press in 1992, a year and a half before this article was published. Credit derivatives were new, untested, and largely unknown, but it seems that several major players in the industry understood early on that these products represented a giant pot of gold, and aggressively positioned themselves to fight off regulatory attempts and corner the market. More on that soon.