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Author: | Published: 1 Nov 2009

Back in 830 AD, the people of Harran in modern-day Turkey believed in astronomy and in the Greek philosophical writings of the legendary sage Hermes Trismegistus. When the Caliph of Baghdad passed through, he ordered the local people to adopt any religion, prophet and holy book mentioned in the Koran, or face the consequences. The Harranians were desperate to maintain their independence and traditional way of thinking, so they found a way out; the Koran mentioned a "Sabian" religion without specifying exactly what it was. So the Harranians told the Caliph they were "Harranian Sabians" and that Hermes was their prophet. The Caliph was satisfied and the Harranian Sabians went on to become an influential group in the Islamic world for centuries afterwards.

The over-the-counter (OTC) derivatives market faces a similar choice today, without an equally effective solution. Market-driven reform is the prophet and sacred text of that market, as...