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Not so with derivatives.
Doing away with derivatives altogether is neither wise nor likely.
Hedge fund managers are allowed much greater leeway with derivatives and leverage, for example.
Already, sufferers from chronic pain are treated with derivatives of these toxins.
Their wizardry with derivatives helped Porsche mount the daring raid on Volkswagen.
Yet the risks associated with derivatives trades have never been tested in a sour economy; their consequences are unknown.
This is precisely what happened recently with derivatives and mortgage securities.
So, too, with derivatives and securities based on debt — things like collateralized loan obligations.
Nor would they necessarily be effective, since firms could hedge against their risky exposures with derivatives.
Beginning with derivatives that everyone agrees are standard is also a way to avoid bogging down the legislation in details of definition.
Over the last decade, thousands of governments around the country entered into deals linking bonds with derivatives, forming complex structures that were supposed to hold down borrowing costs.
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