Swaps and Other Derivatives by Dr Richard R. Flavell, Richard Flavell

Swaps and Other Derivatives Dr Richard R. Flavell, Richard Flavell ebook
ISBN: 0471495891, 9780471495895
Format: pdf
Page: 1
Publisher: Wiley

Interest Rate Swaps and Their Derivatives: A Practitioner's Guide. The financial industry's invention of complex products such as credit default swaps and other derivatives has been widely blamed for triggering the global financial crisis of 2008. On one hand it's disconcerting that it took five years to implement an obvious set of regulations concerning margin requirements for swaps, a type of derivatives contract. President Obama said in a June 17 speech on his plans for finance industry regulatory reform that credit swaps and other derivatives “have threatened the entire financial system”. In other words, the kind of investing that set off the previous global financial crisis in 2007. As reported here, the SEC has temporarily stopped issuing OKs for new ETF firms to develop ETFs that rely on swaps and other derivatives. They are bundles of credit default swaps, or CDS, or other derivatives. Interest Rate Swaps and Derivatives bridges the gap between the theory of these. A CDS is basically protection against default. Existing procedures in the FX swaps and forwards market mitigate risk and help ensure stability. When it comes to Credit Default Swaps and other derivatives, RAFSA legislates that trades must go through a clearinghouse just like stocks on the stock market. Though some Democratic legislators criticized the move, the Treasury went forward with the exemption citing the high-levels of risk management inherent in FX trading. Synthetic CDOs are not made of bonds. This stops the formation of “toxic assets” through opaque pricing. The FX swaps and forwards market is markedly different from other derivatives markets.