The Senate Agriculture, Nutrition and Forestry Committee last week approved a draft measure intended to bring transparency to the derivatives market.

Derivatives have been well exposed in the news cycle in relation to the recent U.S. economic crisis. They are financial contracts used to mitigate the risk of economic loss arising from changes in the value of an asset. That may sound good, but the practice has produced other results.

The bill, sponsored by Senate Agriculture, Nutrition, and Forestry Committee Chairwoman Blanche Lincoln (D-Ark.), would regulate the $450 trillion derivatives market for the first time, requiring most trades to go through exchanges and clearinghouses.

Senate Democrat leaders expect the derivatives bill to be included in a larger financial overhaul package that is being drafted. Sen. Christopher Dodd, (D-Conn.) is heading up the Senate’s work on the financial reform bill and was hoping for a vote this week. He and Sen. Richard Shelby (R-Ala.), who is the minority’s lead voice on financial reform, appeared on NBC’s Meet the Press on Sunday.

Shelby conceded that "inches sometimes are miles," and today said, "I don't believe we'll have a deal today."

The proposed legislation is the most dramatic, broad-based effort to rein in financial institutions since the Great Depression, according to an Associated Press report. Aimed at avoiding a recurrence of the near collapse of the financial system in 2008, it would create a mechanism for liquidating large firms that get into trouble, set up a council to detect system-wide financial threats and establish a consumer-protection agency to police lending actions. The legislation also would require derivatives, blamed for helping precipitate the meltdown, to be traded in open exchanges, AP notes.

On Friday, Senate Republican Leader Mitch McConnell (R-Ky) blocked Democrats' efforts to bring the bill up for debate.

It appears a showdown vote is brewing. Reports are that Democrats are resisting Republican appeals for a broad compromise on financial overhaul legislation and are eager to test whether GOP unity will crack in a broader anti-Wall Street political climate.