Greenspan has since said he’s sorry he opposed regulation of derivatives; Summers, now economic adviser to the President, has signaled his recantation by joining Geithner in calling for strong regulation; Gramm, no longer in the Senate, would not comment to Fortune. The ranks of the converted, however, have been swelled by no less than former President Bill Clinton, who recently told New York Times writer Matt Bai that he was wrong in listening to Greenspan about derivatives and wishes he had demanded that they be regulated by the Securities and Exchange Commission.

Today, the chances for regulatory reform are improved because the administration has made it a top priority, and two powerful legislators, Congressman Barney Frank (D-Mass.) of the House financial services committee, and Chris Dodd (D-Conn.) of the Senate banking committee, have signed on. The administration’s plan calls for new regulation of “systemic risk” and envisions the Fed shouldering most of the job. In that role, the Fed would have czarlike authority to move in on trouble spots wherever they flared up, including derivatives sites—like an AIG—that aren’t part of the banking system.

While believing the Fed the best candidate for this role (best athlete, as headhunters say), Bob Steel, the former Treasury official, calls the regulation of systemic risk a “next to impossible job.” Essentially, it requires someone to be risk manager for the entire United States (and also be cleverly attuned to world risks, of course), when individual companies have shown repeatedly that they are incapable of managing the risk right under their noses. Suffice it to say that AIG believed for years, until the roof fell in, that those CDS it wrote were money-good.