Research output: Contribution in Book/Report/Proceedings - With ISBN/ISSN › Chapter
Research output: Contribution in Book/Report/Proceedings - With ISBN/ISSN › Chapter
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TY - CHAP
T1 - The Justification of Financial Futures Exchanges.
AU - Campbell, David
AU - Picciotto, Salomone
PY - 2000
Y1 - 2000
N2 - The invention of exchange-traded financial futures by commodity exchanges has been justified by Chicagoan financial economics and law and economics on the basis of the unrealistic assumption that trading is costless. Acceptance of this quite circular argument has led to the delegation of extensive powers of self-regulation as public authorities have abnegated their responsibility to evaluate the regulation of derivatives trading, including matters such as the development of new financial products and the governance of exchanges, in welfare-economic terms. Instead of a prejudice toward market �freedom�, there should be stronger public consideration of the optimal public-private mix of regulatory governance structures. This paper proposes criteria for the evaluation of the functional justification of exchange-traded futures as a guide for public policy aimed at reducing the volatility of financial markets.
AB - The invention of exchange-traded financial futures by commodity exchanges has been justified by Chicagoan financial economics and law and economics on the basis of the unrealistic assumption that trading is costless. Acceptance of this quite circular argument has led to the delegation of extensive powers of self-regulation as public authorities have abnegated their responsibility to evaluate the regulation of derivatives trading, including matters such as the development of new financial products and the governance of exchanges, in welfare-economic terms. Instead of a prejudice toward market �freedom�, there should be stronger public consideration of the optimal public-private mix of regulatory governance structures. This paper proposes criteria for the evaluation of the functional justification of exchange-traded futures as a guide for public policy aimed at reducing the volatility of financial markets.
KW - derivatives futures regulation law legitimacy trading
M3 - Chapter
SN - 9041197818
T3 - International banking, finance, and economic law
SP - 121
EP - 133
BT - Modern Financial Techniques, Derivatives and Law
A2 - Hudson, A.
PB - Kluwer Law International
CY - The Hague ; Boston
ER -