Note: Derivatives weren't the sole cause of the financial crisis, but they were one crucial factor. The evidence in the timeline below demonstrates that without change, we're bound to see more derivatives-ignited fiascos. If too many of these fiascos occur at once, we'll risk experiencing another crisis. 

Critics might take issue that we use the word "gamble" here, but given the uber-speculative nature of these transactions, we feel it's merited. We also recognize that there are many types of derivatives and that the timeline here only focuses on the more dangerous types.

As we've stated elsewhere, we're not calling for endless pages of regulation and red tape. The financial industry has been flooded with thousands of pages of regulation—much of which ends up hurting smaller lenders. Instead what we need are a few simple reforms to make derivatives transparent. We also need to ban a few of the more egregious derivatives trades (including credit default swaps).

While all derivatives aren't harmful, the sheer scale and opacity of this market means that our economic future will continue to be fragile unless we demand reform and protest firms that engage in these practices by switching from them. (Not to mention the many advantages you'll enjoy for switching.)

Also see: What are derivatives and why are they dangerous.

Sources

People
Wendy Gramm (source for quote)
Nick Leeson
Larry Summers (quote #1, quote #2)
Brian Hunter
Alan Greenspan (quote #1, quote #2)
Joe Cassano (source for quote)
Howie Hubler
Bruno Iksil

Firms
LTCM
Enron
AIG
Lehman Brothers
MF Global

Also: Megabank lobbyists