Christopher L. Culp
University of Chicago - Booth School of Business; Compass Lexecon
Steve H. Hanke
Johns Hopkins University - Department of Economics
International Economy, September/October 1994
During the past year, the press has had a field day pummeling “derivatives.” The Wall Street Journal has even joined in the fun. The grist for the journalists’ mills has been provided by the big losses on derivatives reported by Metallgessellschaft, Proctor & Gamble, Air Products, Gibson Greeting Cards, Piper Jaffray, and the like.
Derivatives also have not gone unnoticed by the armies of legislative beavers who inhabit the environs of Washington, D.C. Even though over a dozen studies – most by the government – in the last two years have effectively explained the numerous benefits of derivatives, legislators have chosen to focus only on the risks these financial instruments create. Unfortunately for the many users of derivatives, the legislative proposals in the pipeline are rooted in a fundamentally flawed regulatory paradigm and, in fact, would increase financial risks facing derivatives users.
Number of Pages in PDF File: 3
Keywords: Steve Hanke, International Economy, Christopher Culp, Derivatives, Pummeling, Risk, LegislationAccepted Paper Series
Date posted: January 23, 2013
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