We all suffer if derivatives are treated like drugs

Regulators are clamping down on complexity, but risk harming innovation

David Rowe

I have written several times in the past about the role and potential dangers of complexity. Recent years have seen it become one of the animating themes in the prudential regulation of derivatives. Early last year, Avinash Persaud offered an informed and well-balanced discussion of the issue in the annual Financial Stability Review from the Banque de France.

Persaud points out that too much of the public discussion of capital markets regulation reflects little or no appreciation of the social b

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