Costs of derivatives “exaggerated” and benefits “downplayed”, say Fed officials

“Close examination... suggests the potential costs of derivatives are often exaggerated and their benefits downplayed,” said Jeffery Gunther a research officer, and Thomas Siems, a senior economist and policy adviser, both working in the financial industry studies department of the Federal Reserve Bank of Dallas.

“Recent data provides evidence that despite talk of a breakdown, the banking system has been remarkably resilient,” the pair said in a paper ‘Debunking Derivatives Delirium’. “Contr

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