Source: Brady Dennis, Washington Post ( Free Registration )

Two senators charged with shaping new rules to oversee the vast, unregulated over-the-counter derivatives market said Friday that they have failed to reach agreement on the legislation, considered a crucial element of the effort to revamp the nation’s financial regulatory system.

Sens. Jack Reed (D-R.I.) and Judd Gregg (R-N.H.) had spent months working through the details but could not settle on language in time for next week’s scheduled debate on a wide-ranging regulatory overhaul bill. Rather, the bill introduced this week by Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate banking committee, will include placeholder language on derivatives from an earlier draft.

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