As the financial crisis exploded with full force in 2008, it was obvious that something was gravely wrong with the huge, unregulated market for derivatives. Lehman Brothers had $738 billion of these contracts—which are based on the value of some other asset, such as a stock or a bond or a hog belly—on its books when it failed on September 14, 2008.

Lehman certainly wasn’t alone. Over the next few months, insurer AIG reported as much as $53.5 billion of derivatives losses—losses that were linked to nearly one third of its $182.5 billion federal bailout. The scope of this derivatives exposure was beyond anything investors had ever seen. Enron, which had failed just a few years before, had only $22 billion in derivatives contracts on its books.

President Obama proposed soon after he took office that his administration would crack down on derivatives, an idea that had been kicking around Washington for decades. Yet a year and a half after Lehman’s collapse, slow-moving regulators and lawmakers have made only halting progress toward imposing law and order on the Wild West of the financial world. And the problem just keeps getting worse. Derivatives are at the heart of the debt crisis in Greece, where the government, with the help of Goldman Sachs, used currency swaps to take advantage of exchange rates by making its dollar- and yen-denominated debt look like cheaper euro-denominated debt.

In December 2009, the House of Representatives finally approved a far-reaching bill to reform the financial regulatory system, including a requirement that derivatives be traded on a clearinghouse, a key plank in the administration’s reform platform. Yet the bill is making no discernible progress in the Senate, where it has been bogged down for months in a bitter partisan dispute.

As the lawmakers argued over the details of the bill, financial institutions have quietly grabbed the initiative for self-regulation. A year ago, on March 9, 2009, a group of banks began clearing derivatives on a new entity called ICE Trust US, a clearinghouse owned by Intercontinental Exchange Inc., of Atlanta, which operates futures exchanges and over-the-counter markets.

Intercontinental is hardly a household name, but it has been a major force in alternative forms of trading since it was founded in 2000 by Jeffrey Sprecher, a former power plant developer. Today, the company is listed on the NYSE and has a market cap of $8 billion.

With its deep roots in the financial world, Intercontinental was able to enter the promising new derivatives clearing market in a forceful way. In October 2008, Intercontinental acquired The Clearing Corporation, of Chicago, which provides services for over-the-counter derivatives trading. TCC’s ownership roster was like a who’s who of banks: Bank of America, Citi, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, Deutsche Bank, UBS, and Credit-Suisse. TCC and ICE then formed ICE Trust US, to clear trades for derivatives known as credit default swaps, which can be used as a form of insurance against credit defaults. It focuses on trades among banks and brokers.

Intercontinental takes half of ICE Trust US profits, and the nine founding banks split the remaining profits. Over the last few months, Barclays, HSBC, the Royal Bank of Scotland, and BNP Paribas have been approved as trading members of ICE Trust US, although they don’t have an ownership stake.

While political leaders in Washington called for a new clearinghouse system and wrangled over the details, ICE Trust US was getting down to business. During the nine months between March 2009 and December 2009, ICE Trust US processed $3.1 billion in trades of credit default swaps and collected $30 million in fees—which is sort of like a car dealer saying it sold $200 million worth of cars and took in $5 million in revenue.