Cynical Use of Derivatives Has Left Market in A Pickle

Financial Times Letter Published: January 31, 2008
By Janet Tavakoli

Sir, Robert Pickel, chief executive of the International Swaps and Derivatives Association, made a predictable smoke-screen response to the criticism of the credit derivatives market made by William Gross, Pimco’s chief executive (“Net exposure is the best guide to derivatives’ market impact”, January 29).

Mr Gross’s numbers may have been gross, but the debatable “net” numbers offered by Mr Pickel seem to be offered only to obscure the central point.

Credit derivatives have had an astonishing impact on the recent destabilisation of the capital markets.

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