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Article: Derivative debacles: case studies of large losses in derivatives markets.
- Article from:
- Economic Quarterly
- Article date:
- September 22, 1995
- Author:
CopyrightCOPYRIGHT 1995 Federal Reserve Bank of Richmond. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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To avoid all mistakes in the conduct of great enterprises is beyond man's powers. Plutarch, Lives: Fabius.
Recent years have witnessed numerous accounts of derivatives-related losses on the part of established and reputable firms. These episodes have precipitated concern, and even alarm, over the recent rapid growth of derivatives markets and the dangers posed by the widespread use of such instruments.
What lessons do these events hold for policymakers? Do they indicate the need for stricter government supervision of derivatives markets, or for new laws and regulations to limit the use of these instruments? A better understanding of the events surrounding ...