Summary of In Defense of Derivatives
From Beer to the Financial Crisis
Cato Institute, 2015
In the long run, rules constraining the use of derivatives are likely to do more harm than good.
Derivatives have borne the brunt of blame for the 2008 financial crisis. However, painting derivatives with one broad brush is highly misleading and patently incorrect, according to finance professor Bruce Tuckman. He posits that government-devised rules to avoid another crisis fail to address the true causes of the collapse and may discourage the use of all derivatives, which help businesses manage risk. getAbstract recommends this comprehensive overview of derivatives to regulators, executives, investors and others with an interest in minimizing risks to the financial system.
In this summary, you will learn
- How businesses appropriately use derivatives
- Why derivatives were not responsible for the 2008 financial crisis
- How regulators might better focus their efforts to reduce risks to the financial system
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