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Regulate Otc Derivatives By Deregulating Them, Lynn A. Stout
Regulate Otc Derivatives By Deregulating Them, Lynn A. Stout
Cornell Law Faculty Publications
When credit markets froze up in the fall of 2008, many economists pronounced the crisis inexplicable and unforeseeable. Lawyers who specialize in financial regulation, and especially the small cadre who specialize in derivatives regulation, knew better.That's because the roots of the catastrophe lay not in changes in the markets, but changes in the law. In particular, the credit crisis can be traced to Congress's 2000 passage of the Commodity Futures Modernization Act, which radically altered the traditional legal approach to financial derivatives.
This shift in the legal treatment of financial derivatives has brought the banking system to its knees. The …
Regulate Otc Derivatives By Deregulating Them: Response To Comments, Lynn A. Stout
Regulate Otc Derivatives By Deregulating Them: Response To Comments, Lynn A. Stout
Cornell Law Faculty Publications
Response to comments by Jean Helwege, Peter Wallison, and Craig Pirrong on the author's article, "Regulate OTC Derivatives By Deregulating Them." Article predates the author's affiliation with Cornell Law School.
How Deregulating Derivatives Led To Disaster, And Why Re-Regulating Them Can Prevent Another, Lynn A. Stout
How Deregulating Derivatives Led To Disaster, And Why Re-Regulating Them Can Prevent Another, Lynn A. Stout
Cornell Law Faculty Publications
When credit markets froze up in the fall of 2008, many economists pronounced the crisis both inexplicable and unforeseeable. That’s because they were economists, not lawyers.
Lawyers who specialize in financial regulation, and especially the small cadre who specialize in derivatives regulation, understood what went wrong. (Some even predicted it.) That’s because the roots of the catastrophe lay not in changes in the markets, but changes in the law. Perhaps the most important of those changes was the U.S. Congress’s decision to deregulate financial derivatives with the Commodity Futures Modernization Act (CFMA) of 2000.
Prior to 2000, off-exchange derivatives contracts …