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It Wasn’t Derivatives That Caused The Financial Crash So Why Regulate Them?

IT wasn’t derivatives that cauded the financial crash. Therefore regulating derivatives won’t be the magic wand that prevents another financial crash. This is something that they seem to have forgotten over at The Guardian:

The CFTC, under Gensler, has been a darling of the few remaining policymakers who listened to the complaints of Occupy Wall Street. The agency has been largely openly antagonistic towards Wall Street in the sense that it has insisted on more regulation of derivatives, the Jekyll-and-Hyde financial instruments that are as speculative as they are about reducing risk. The financial crisis showed us that derivatives, which are meant to help investors hedge against risk, are often abused as vehicles of profitable speculation. The question that is before Congress right now is: how do you allow derivatives while curbing the abuse?

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Posted: 14th, November 2013 | In: Money, Reviews | Comment