In the future, however, Bookstaber says he believes Dodd-Frank will improve the landscape: “The legislation will restrict the ability of banks to create complex derivatives just for the sake of doing it,” he said. Central clearing will also “pull derivatives back from the edge” and eliminate what has become an “informational asymmetry between the banks that make derivatives and the investors that buy them.” Reduced complexity and increased standardization will eliminate the information “game” said Bookstaber and that will reduce innovation for the better in this space. Click on the image to watch the entire video.
Bookstaber: Derivatives and Gaming the Market
Coverage of the 2011 Investment Innovation Conference
- By: Caroline Cakebread
- February 3, 2012 September 13, 2019
- 09:44