Derivatives Debacles: Case Studies of Large Losses in Derivatives Markets

39 Pages Posted: 15 Nov 2012

Date Written: 1995

Abstract

Numerous accounts of derivatives-related losses experienced by established and reputable firms have raised concerns over the rapid growth of derivatives markets. Two of the largest derivatives-related losses to date involved Metallgesellschaft AG of Germany and Barings PLC of England, which both lost over $1 billion. Such incidents often lead to demands for stricter regulation. But a careful study of these incidents suggests no need for sweeping regulatory reform. It does suggest a need for greater international cooperation among regulators, however.

Suggested Citation

Kuprianov, Anatoli, Derivatives Debacles: Case Studies of Large Losses in Derivatives Markets (1995). FRB Richmond Economic Quarterly, vol. 81, no. 4, Fall 1995, pp. 1-39, Available at SSRN: https://ssrn.com/abstract=2129302

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