The History of Financial Derivatives: A 2-Part Feature - Part 1: The Emergence and Development of Financial Derivatives Post-Bretton Woods

11 Pages Posted: 2 May 2015

See all articles by Hilary Till

Hilary Till

Premia Research LLC; EDHEC-Risk Institute; J.P. Morgan Center for Commodities, University of Colorado Denver Business School; Global Commodities Applied Research Digest

Date Written: April 1, 2014

Abstract

This 2-part series discusses the emergence of financial derivatives after the collapse of the Bretton Woods accord in 1971. In Part 1, the article explains the concepts that enabled financial derivatives markets to flourish, focusing on the required mathematical concepts. Part 2 continues with enumerating the business models that have been employed by successful commercial participants in the financial derivatives arena. Part 2 also briefly covers the development of over-the-counter financial derivatives, including their misuse during the lead-up to the Global Financial Crisis. The article concludes with the possibility that we may be nearing the limits of what the power of mathematics can do to hedge, and thereby conquer, financial risk.

Keywords: hedging, exchange rate, history, derivatives

JEL Classification: G1, N22, N1, N2

Suggested Citation

Till, Hilary, The History of Financial Derivatives: A 2-Part Feature - Part 1: The Emergence and Development of Financial Derivatives Post-Bretton Woods (April 1, 2014). Available at SSRN: https://ssrn.com/abstract=2601043 or http://dx.doi.org/10.2139/ssrn.2601043

Hilary Till (Contact Author)

Premia Research LLC ( email )

United States
312-583-1137 (Phone)
312-873-3914 (Fax)

HOME PAGE: http://customindices.spindices.com/custom-index-calculations/premia/all

EDHEC-Risk Institute

Nice
France

HOME PAGE: http://risk.edhec.edu/

J.P. Morgan Center for Commodities, University of Colorado Denver Business School ( email )

1475 Lawrence St.
Denver, CO 80202
United States

HOME PAGE: http://www.business.ucdenver.edu/commodities

Global Commodities Applied Research Digest ( email )

J.P. Morgan Center for Commodities
1475 Lawrence Street
Denver, CO 80202
United States

HOME PAGE: http://www.jpmcc-gcard.com/hilary-till

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