10:43 AM
Expert Warns Banks More Exposed to Derivatives Now Than in 2008
Could banks really be more exposed to derivatives than they were two years ago?
That's what Harold Bradley, the chief investment officer for the Kauffman Foundation contends in a discussion on CNBC with Maria Bartiromo and Herb Greenberg.
Bradley says he reached that conclusion after looking at government statistics, including a chart from the Bank for International Settlements.
From CNBC:
"So we're talking about the 'new normal' and saying markets are deleveraging, they're getting more transparent, we're de-risking, and yet at I look at this explosion in notional derivative values, and I'm thinking there's something broken. If you divide it by, say, U.S. GDP or divide it by U.S. credit markets, or you divide it by market cap, on all three scores, we have far more derivatives exposure today than we did two years ago. And I think that's the reason that I would be concerned about what this is telling us about the risks that banks are taking in a nominal zero interest rate environment."As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio