Calming the waters

Article Abstract:

There has been little progress in developing measures to avoid a new world financial crisis of the type that occurred in 1997-1998. There is some agreement that banks in emerging economies should not develop foreign currency debts that are not hedged. Floating exchange rates would help avoid this problem, but are not enough on their own. Capital controls have side effects which can involve corruption. A universal debt-rollover option has been suggested by economics professor, Willem Buiter, and Birkbeck College professor, Anne Siebert, from England. There are a number of advantages to this plan such as the lack of a need for public money.

Laws, regulations and rules, Capital market, Capital markets

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Future perfect

Article Abstract:

Derivatives have received some bad publicity, but concerns about them have lessened as they have come to be better understood. Options allow assets to be bought or sold on set dates, and function as a type of insurance. Farmers and their clients have been important in the development of the derivatives market. Some companies have suffered losses from their usage of derivatives, but the derivatives themselves have not been the problem, rather they can be misused, and they do not appear to increase volatility in financial markets.

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The swaps emperor's new clothes

Article Abstract:

Changes affecting the role of credit derivatives in financial markets are examined in detail.

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