"Derivatives businesses are like hell: easy to enter and almost impossible to exit,” Warren Buffett said in 2002, as Berkshire Hathaway tried to get rid of the Gen Re Securities derivatives portfolio it acquired as part of a bigger deal in 1998. That portfolio contained 23,128 contracts with more than 600 counterparties. It took nearly five years to exit the bulk of the portfolio, costing Berkshire more than $400 million, but even today there are still some live trades on the books.
The week on Risk.net, October 6-12, 2017Receive this by email
- SGX, HKEX expect to be among first wave of Mifid II equivalence
- Leaked EU doc could shield legacy swaps from clearing grab
- Quantile, TriOptima face off in cleared swaps compression battle
- ABS set for revival under US Treasury’s liquidity buffer plans
- Quants stymied by lack of alternative risk premia flows data