Governing Global Derivatives analyzes the role of the most important financial innovation of the last two decades - financial derivatives - in a global dimension. The evolution of derivatives, especially Over the Counter (OTC), and the possibility of managing risks tailored to customers' needs, are the basic recipe for the success of derivatives. This book focuses on the role of derivatives from a macroeconomic point of view, considering how monetary theory and policy, fiscal policy and the growth process are affected. It fills a gap by rethinking the way financial markets are considered in the macroeconomy and the transmission mechanism of impulses.
'The subprime crisis and the prolonged turbulence are the results of financial deregulation and freedom allowed by national and international financial institutions, unable to cope with such risks, and unaware of macroeconomic effects of derivatives. The research provides useful insights into the potential danger we have not yet experienced: sovereign debt management by means of derivatives. This book will be valuable for academics, professionals and civil servants willing to understand such complex financial phenomena.' Paolo Savona, Luiss G Carli University, Rome, Italy 'In her book Governing Global Derivatives, Professor Chiara Oldani makes understanding complex financial instruments more user friendly. In the niche arena of economics, derivatives are by far the most difficult to articulate with seamless fluidity. Professor Oldani does so with ease.' D. Sidney Potter, author of The Flip: The True Life Story of How a New Tract Home Investor Went from Zero to Hero, Back to Zero
Contents: Preface; The macroeconomics of derivatives: the issue of measurement and accounting; Derivatives and monetary policy: global stability; Derivatives and fiscal policy: risks and hazard; The theory of investments and derivatives: the frontier of economic analysis; Summary; Challenges in governing global derivatives; References; Index.