Investors Shy Away from Derivatives

The US derivatives market has suffered in the financial downturn.  This may seem an unsurprising fact given that most financial markets have been affected in one way or another by a global recession…

The data released by the BIS in the USA shows that the derivatives market has shrunk for the first time since data was first compiled ten years ago.  Apparently investors have been less willing to get involved in high-risk assets since the collapse of the Lehman Brothers in September 2008, and the subsequent losses of other banks and financial institutions.

Where other markets have recently seen a slight increase in risk appetite, it may take the derivatives market – that is, commodities, currencies, loans, interest rates, weather, bonds and stocks – a little longer to regain strengths.

US President Obama has called for the derivatives market to undergo tougher regulation.

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