Mark Brickell has worked for over a decade to keep government regulators out of the over-the-counter derivatives market. He hasn't given up yet.

The former JPMorgan executive who served as chairman of the International Swaps and Derivatives Assoc., is out today with a piece in the WSJ warning against the dangers of increasing government oversight of OTC derivatives. Swaps did not cause the financial crisis, he says. They are benign contracts that help big companies like McDonald's hedge its currency risk at a low cost.

Back in 1998, Brickell, Alan Greenspan, Larry Summers and Robert Rubin all sang the same tune, arguing that imposing new regulations on OTC derivatives could actually cause a financial collapse instead of preventing one.

These days, most of those guys have changed their tune. Not Brickell. He’s still fighting the good fight.

But what of AIG? That federally regulated thrift holding company lost billions by writing mortgage insurance, purchasing mortgage-backed securities, and writing credit default swaps that guaranteed mortgage bonds owned by others. Its losses across multiple business lines were not a swaps problem, they were a mortgage problem—and what was true for AIG was true across the financial system.

Instead, swap activity has been monitored for the most part by the banking authorities. Banking supervisors have had a good window on the business, and the opportunity to give a nudge when they think banks need it. The contracts the banking supervisors don't see (the ones between nonbanks) are unlikely to be systemically important. They are fewer, smaller and shorter term—and with proper credit analysis even these swaps will pop up on the radar of banks and their supervisors.

A system-wide misjudgment of mortgage risk caused the financial crisis; understanding how that happened is the essential first step toward the policy reforms that will help us achieve the goal of financial stability. Legislation that targets over-the-counter derivatives will not further that goal.