The Role of Intermediaries in Derivatives Markets: Evidence from VIX Options

Abstract This paper contributes to the debate on the role of financial derivatives for capitalism. It responds to Bryan and Rafferty’s defence of their analysis and their critique of my own. The paper argues that their analysis confuses what a financial derivative does, and mixes together different kinds of derivative – and non-derivative – that play very different roles. After detailing these points, the paper discusses the relationship between gold, money and derivatives, rejecting their notion that derivatives are some kind of new ‘commodity money’. An important theme absent from Bryan and Rafferty’s analysis is the relationship of financial trading and derivatives markets to parasitism in the imperialist world economy. To illustrate this, the paper notes advantages enjoyed by the major financial powers – the US and the UK – that are the main centres for the origination of derivatives and for derivatives trading.

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Systemic risk and banking regulation: Some facts on the new regulatory framework

Corporate Ownership and Control ◽

10.22495/cocv12i2p5 ◽

2015 ◽

Vol 12 (2) ◽

pp. 52-63 ◽

Cited By ~ 1

Author(s):

Michele Bonollo ◽

Irene Crimaldi ◽

Andrea Flori ◽

Fabio Pammolli ◽

Massimo Riccaboni

Keyword(s):

Systemic Risk ◽

Banking Regulation ◽

Regulatory Framework ◽

Data Availability ◽

Relevant Role ◽

Recent Financial Crisis ◽

The Stability ◽

Derivatives Markets ◽

Shed Light

The recent financial crisis highlighted the relevant role of the systemic effects of banks’ defaults on the stability of the whole financial system. In this work we draw an organic picture of the current regulations, moving from the definitions of systemic risk to the issues concerning data availability. We show how a more detailed flow of data on traded deals might shed light on some systemic risk features taken into account only partially in the past. In particular, we analyse how the new regulatory framework allows regulators to describe OTC derivatives markets according to more detailed partitions, thus depicting a more realistic picture of the system. Finally, we suggest to study sub-markets illiquidity conditions to consider possible spill over effects which might lead to a worsening for the entire system

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The Role of Financial Innovation and the Derivatives Market in the World and Turkey in the Context of the Global Crisis of 2008

Handbook of Research on Global Enterprise Operations and Opportunities - Advances in Information Quality and Management ◽

10.4018/978-1-5225-2245-4.ch014 ◽

2017 ◽

pp. 224-243

Author(s):

Nizamülmülk Güneş

Keyword(s):

Developing Countries ◽

Interest Rates ◽

Financial Market ◽

Financial Innovation ◽

Financial Instrument ◽

Global Crisis ◽

High Interest ◽

The World ◽

Derivatives Markets

In Derivatives markets, contracts made concerning an asset or a financial instrument between a buyer and a seller entered into today regarding a transaction to be fulfilled at a future point in time. The derivatives markets incorporate forward, swap, futures and options transactions. Banks, the principle actor in financial markets, finds derivatives favorable in developing countries like Turkey in which there is high interest rates and inflation. It is crucial to express the role of the derivatives markets, whereas the uncertainty concerns are perceived enormously. 2008 mortgage crises, the main cause is stated as to sheer of expectations, which started in US and spread out to all developed and developing countries evoke to encounter against risks intensely. The aim of this paper is to study how efficient is the use of the derivatives market instruments in Turkey, a developing country, by the banks and other financial market actors after the 2008 Global Crises.

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The Role of Financial Innovation and the Derivatives Market in the World and Turkey in the Context of the Global Crisis of 2008

Risk and Contingency Management ◽

10.4018/978-1-5225-3932-2.ch022 ◽

2018 ◽

pp. 434-452

Author(s):

Nizamülmülk Güneş

Keyword(s):

Developing Countries ◽

Interest Rates ◽

Financial Market ◽

Financial Innovation ◽

Financial Instrument ◽

Global Crisis ◽

High Interest ◽

The World ◽

Derivatives Markets

In Derivatives markets, contracts made concerning an asset or a financial instrument between a buyer and a seller entered into today regarding a transaction to be fulfilled at a future point in time. The derivatives markets incorporate forward, swap, futures and options transactions. Banks, the principle actor in financial markets, finds derivatives favorable in developing countries like Turkey in which there is high interest rates and inflation. It is crucial to express the role of the derivatives markets, whereas the uncertainty concerns are perceived enormously. 2008 mortgage crises, the main cause is stated as to sheer of expectations, which started in US and spread out to all developed and developing countries evoke to encounter against risks intensely. The aim of this paper is to study how efficient is the use of the derivatives market instruments in Turkey, a developing country, by the banks and other financial market actors after the 2008 Global Crises.

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Part I United States, 3 Lehman’s Derivative Portfolio: A Chapter 11 Perspective

10.1093/law/9780198755371.003.0003 ◽

2017 ◽

Author(s):

Lubben Stephen J

Keyword(s):

United States ◽

Financial Institutions ◽

Financial Institution ◽

Systemic Risks ◽

Increased Risk ◽

Will Force ◽

Derivatives Markets ◽

Safe Harbours

This chapter looks at the immediate cause of Lehman’s failure, which it argues was the repo market and the company’s inability to access funding for its operations at that time. Lehman’s derivatives were not the direct cause of its failure, but its derivatives, and the growth of the derivatives markets in general, led to the assumption of outsized risks and systemic weaknesses that facilitated the crisis. This chapter suggests that the continuation of the safe harbours ‘as is’ renders chapter 11 nonviable for larger financial institutions, and recent contractual attempts to work around the safe harbors are insufficient to solve the problem, while the increased role of clearinghouses in financial institution failures will force regulators to confront difficult choices. In short, the regulators will have to balance two competing systemic risks: the risk of an unruly resolution of the financial institution, balanced against increased risk to the clearinghouse.

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Output-Hedging of Electric Utility Firms: The Role of Electricity Derivatives Markets

SSRN Electronic Journal ◽

10.2139/ssrn.3092157 ◽

2018 ◽

Author(s):

Markus Hang ◽

Jerome Geyer-Klingeberg ◽

Andreas Rathgeber ◽

Lena Wichmann

Keyword(s):

Electric Utility ◽

Electricity Derivatives ◽

Derivatives Markets

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Efficiency of Foreign Exchange and Its Related Derivatives Market: Evidence From Korea

International Journal of Financial Research ◽

10.5430/ijfr.v10n2p92 ◽

2019 ◽

Vol 10 (2) ◽

pp. 92

Author(s):

Min-woo Kang

Keyword(s):

Foreign Exchange ◽

Foreign Exchange Market ◽

Forward Rate ◽

Exchange Market ◽

Central Bank Intervention ◽

Interest Rate Parity ◽

Long Time ◽

Derivatives Markets ◽

Forward Rate Unbiasedness Hypothesis

This study aims to test the efficiency of the Korean foreign exchange market and examine its determinants by employing several well-established methodologies based on current theoretical arguments on the forward rate unbiasedness hypothesis and covered interest rate parity. The empirical findings indicate that the foreign exchange market and its related derivatives markets were inefficient during the period 2006-2016, but have improved considerably after the 2008-2009 financial crisis. As the inefficiency prevailed for a long time, emphasis is on the presence of risk premia in the international financial market and the role of central bank intervention.

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The changing landscape for derivatives

Journal of Financial Engineering ◽

10.1142/s2345768614500214 ◽

2014 ◽

Vol 01 (03) ◽

pp. 1450021 ◽

Cited By ~ 2

Author(s):

John Hull

Keyword(s):

Decision Making ◽

Credit Crisis ◽

Over The Counter ◽

Central Counterparties ◽

Derivatives Markets ◽

The Way

This paper describes the changes taking place in derivatives markets as a result of the 2007–2009 credit crisis. It discusses the developments of new platforms for trading, the use of central counterparties for clearing, the role of trade repositories, and the requirements for the posting of collateral. It explains the way in which the over-the-counter and exchange-traded derivatives markets are converging and argues that liquidity is becoming as important as capital to banks in their decision making.

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