Search

HOW could a modest increase in seriously delinquent subprime mortgages, which amounted to an additional $34 billion in troubled loans, so disrupt the $57 trillion U.S. financial system last summer [...]

In order to better inform the debate over the regulation of OTC derivatives, the Derivatives Study Center has produced this brief Primer that describes the structure of those markets and [...]

In light of the present difficulties surrounding the efforts of Brazil to restructure its $264 billion debt burden, the Derivatives Study Center, with the New Rules for Global Finance coalition, [...]

Derivatives played a key role in the East Asian financial crisis of 1997. Their use developed alongside the growth of capital flows to those developing economies in the 1990s. Derivatives [...]

ASIDE from some shared names-and the movie Paris, Texas, which celebrates one of them--there seem to be few connections between European and U.S. cities. But modern finance has changed that [...]

THREE innovations in electronic trading of stocks and options have been in the headlines recently: high-frequency trading, flash trades, and dark pools. Technical improvements such as these are usually assumed [...]

THE global financial crisis has had a devastating impact on major financial markets, undermining the solvency of firms, disrupting trading liquidity, and forcing a rethinking of prudential regulation. The crisis [...]

THE NAMES sound as if they were toys or children's stories--KIKO in Korea, TARN in Brazil and other countries. But they are part of a business model based on the [...]

UNTIL problems surfaced during the global financial crisis, money markets were often taken for granted as plain-vanilla, low-volatility segments of the financial system. For the most part, money markets provide [...]

FINANCIAL markets are complex organizations with their own economic and institutional structures that play a critical role in determining how prices are established, or 'discovered.' These factors also shape the [...]

The article focuses on the crisis in the U.S. subprime mortgages. Started with poor underwriting practices, the problem is propagated at each stage of the complicated process in which a risky home loan is originated. It becomes an asset-backed security that forms part of the collaterized debt obligation that is rated and sold to investors. However, there are key objectives to correct the problem, including the improvement of liquidity management, promotion of market liquidity and due diligence.

Phosphorus loading to the recently impounded B. Everett Jordan and Falls of the Neuse reservoirs in North Carolina has been the subject of public debate and research for many years. A strategy was developed in 1983 to reduce phosphorus inputs from both point and nonpoint sources. Monitoring and research results, nutrient budget analyses, application of simple nutrient and chlorophyll a models, and knowledge of the emerging technology of biological phosphorus removal have led to the development of a modified strategy for dealing with point sources. This includes effluent limits (total phosphorus = 2 mg/L as a quarterly average) for all new and expanding dischargers and all existing dischargers greater than 50,000 gallons per day (gpd) in both basins.

The article discusses the negative implication of derivative transactions among local governments who have been crippled with financial losses. It mentions that such transactions is defined as a financial contract whose value depends on stocks, bonds, currencies and interest rates. It affirms that it is important for local municipalities to consult independent third party advisors who can analyze risks and provide proper pricing.

The article explores the effect of three innovations in electronic trading of stocks on pricing efficiency at the market microstructure level. Innovations are high-frequency trading, also known as black box trading, flash trades, the important part of the business model for some exchanges, and dark pools, the electronic trading systems used by broker-dealers, institutional investors and hedge funds. The article explores the importance of technological innovations in increasing productivity.

The article discusses the reform of financial regulation in the U.S. in response to global financial crisis. The crisis has made markets demand for regulatory change. The reform is reflected in the proposal from organizations including Financial Stability Board, Institute of International France Inc., and U.S. Treasury Department. The new proposal includes systematic stability, reorganization, and price transparency which represents fundamental shift from the laissez-faire emphasis.

The article offers information on exotic derivatives such as knock-in, knock-out (KIKO) and target redemption forwards, swaps, or notes (TARNs) that have caused business losses in firms from emerging markets. It explores the characteristics of these derivatives based on structure and costs. It argues that these derivatives are not capable of hedging because they do not meet the firms' risk exposure. Ways on how to regulate the financial risks posted by these derivatives are also offered.

Comments on the negative impact of legislative bills aimed at deregulating the derivative securities market in the United States. Explanation of the provisions of the proposed bills; Predictions of how the bills will affect the derivatives market.