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Why The Law Hates Speculators: Regulation And Private Ordering In The Market For Otc Derivatives, Lynn A. Stout Jan 1999

Why The Law Hates Speculators: Regulation And Private Ordering In The Market For Otc Derivatives, Lynn A. Stout

Cornell Law Faculty Publications

A wide variety of statutory and common law doctrines in American law evidence hostility towards speculation. Conventional economic theory, however, generally views speculation as an efficient form of trading that shifts risk to those who can bear it most easily and improves the accuracy of market prices. This Article reconciles the apparent conflict between legal tradition and economic theory by explaining why some forms of speculative trading may be inefficient. It presents a heterogeneous expectations model of speculative trading that offers important insights into antispeculation laws in general, and the ongoing debate concerning over-the-counter (OTC) derivatives in particular.

Although trading …


Stability In World Financial Markets: Introductory Remarks, Alan Rechtschaffen Jan 1999

Stability In World Financial Markets: Introductory Remarks, Alan Rechtschaffen

Fordham Journal of Corporate & Financial Law

No abstract provided.


Recent Market Events And The Foundation For Global Market Crises: A Lawyer's Perspective, Philip H. Harris Jan 1999

Recent Market Events And The Foundation For Global Market Crises: A Lawyer's Perspective, Philip H. Harris

Fordham Journal of Corporate & Financial Law

No abstract provided.