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The use of derivatives -- obligations derived from debt and equity securities, commodities and currencies -- has "significantly improved the flexibility of economies," Mr. Greenspan told a Banque de France symposium via satellite.
Use of derivatives for hedging.
The use of derivatives in connection with municipal bonds has grown rapidly in the last five years.
Robert L. McDonald, a professor of finance at Northwestern, advised Enron on the use of derivatives from 1993 to 1995.
Those earnings had grown volatile as a result of investments in increasingly complex transactions involving use of derivatives.
Another problem is the use of derivatives — specifically, the credit-default swaps that nearly toppled American International Group last fall.
Securitisation is in its infancy, as is the use of derivatives.
Mr. Buffett defended Berkshire Hathaway's use of derivatives, arguing that the company maintains a limited amount.
The French authorities are also investigating Mr. Arnault's use of derivatives to build his stake.
The use of derivatives to create stealth positions is even more worrisome.
Outside the financial sector companies' use of derivatives is mostly unregulated and is believed to have increased sharply in the last few years.
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