The fall of Lehman Brothers in September 2008 broke the dam of the financial system and unleashed the flood tide that had been building up for at least a year. It also brought derivatives to the forefront of the crisis, with widespread concern about counterparty risk and the over-the-counter market’s lack of transparency. But the effects of the crisis for derivatives have been varied and surprising. Siân Williams surveys the market and discovers that while some sectors have suffered, others have thrived – and as some face deep reforms, others are untouched by regulators.
So much has happened in derivative markets in the past year, and so many public statements have been made, demanding that the market move in this or that direction, that it is easy to lose sight of what has actually changed, and what has remained the same.
In particular, there are marked contrasts in the ways...