A US legislative plan to regulate the near-$600,000bn market in over-the-counter derivatives suggests lawmakers debate the idea of banning so-called “naked credit default swaps”, which allow investors to speculate on the creditworthiness of companies.

The proposal by key committees of the House of Representatives would push most derivatives on to an exchange or clearing house but leaves open the issue of whether to outlaw CDSs – a type of insurance against bonds defaulting – in which the buyer does not own the underlying asset.

Congress is weighing how to regulate the opaque market as part of an overhaul of financial regulation that Barack Obama, president, wants to see completed by the end of this year. On Thursday the chairmen of the House financial services and agriculture committees, which share jurisdiction over the issue, released agreed principles that will form the backbone of legislation.