Derivatives: Risks That Remain (Macquarie series in applied finance)

The collapse of Barings on 27 February 1995 capped over a year of sensational losses in financial markets, most of them blamed on derivatives. Barings, Metallgesellshaft, Proctor & Gamble and Orange County should remind us of the risks of uncontrolled derivatives trade. Instead, time and new opportunities dim the collective memory of financial markets. The extent and variety of derivatives trade have reached new highs, and complacency has returned. Derivatives: The risks that remain offers a comprehensive analysis of the risk management issues for the safe use of derivatives. To prise open those issues, the book reviews the recent development of the derivatives markets in the Asia-Pacific, and three of the disasters of 1994/95. Market developments, risks and responses that emerge are examined from each of the relevant perspectives provider and end-user, corporate and institutional, regulator and market. Contributors to the book represent each of those perspectives, and the several disciplines necessary to come to terms with the reality of derivatives. The result is a tangible understanding of the new market environment for derivatives, the new risk management tools