Imagine a world without derivatives

The internet has been commonplace since the mid 90s and has been instrumental in all sorts of atrocities. Would I ban it? No way. The benefits far outweigh the costs. That’s not the approach that Alan Kohler took in his Business Spectator column of 22 August, titled ‘Derivatives should just be banned’. Unlike the internet, derivatives have been around for a while. Futures trading on Japan’s Dojima Rice Exchange began in 1710. The first commodities forward contract was written in the United States in 1851 and even the relative newcomer—the financial derivative—has been traded since the early 70s. Before banning...

The internet has been commonplace since the mid 90s and has been instrumental in all sorts of atrocities. Would I ban it? No way. The benefits far outweigh the costs.

That’s not the approach that Alan Kohler took in his Business Spectator column of 22 August, titled ‘Derivatives should just be banned’.

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