Pummeling Derivatives

International Economy, September/October 1994

3 Pages Posted: 23 Jan 2013

See all articles by Christopher L. Culp

Christopher L. Culp

Johns Hopkins University - Institute for Applied Economics, Global Health, and Study of Business Enterprise; Swiss Finance Institute; Compass Lexecon; Financial Economics Consulting, Inc.

Steve H. Hanke

Johns Hopkins University - Department of Economics

Date Written: 1994

Abstract

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.

Keywords: Steve Hanke, International Economy, Christopher Culp, Derivatives, Pummeling, Risk, Legislation

Suggested Citation

Culp, Christopher L. and Hanke, Steve H., Pummeling Derivatives (1994). International Economy, September/October 1994, Available at SSRN: https://ssrn.com/abstract=2205425

Christopher L. Culp

Johns Hopkins University - Institute for Applied Economics, Global Health, and Study of Business Enterprise ( email )

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Steve H. Hanke (Contact Author)

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