CAPITAL ¢ By Davip Wessei
SEPT, pF
| Teams,
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Coating pre
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Symes ets
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Sepciceatae ary ee
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Seattastne® res
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Hues ae han ey
Wall Street Is Cleaning Derivatives Mess
‘Stocks, hands ané options traded
on exchriges yo through dearng
houses, whch ict a ie pees
something goes ayy
trade. ty this marke, there's
ingnouse yet. Uni recent.
dion teven enter mas tei ef
‘Sap tates nto a eomputer catahase
to be-sure ten sides agted on the
‘ME Geithoer, the Past Revere of
this ser. bean Shouting abou all of
{hs blere the end of hus st year
(he Job, [nan Oetber 204 gees,
te noe that inadequate tinge
Dlumbing was "a potential sure ot
‘ucertalny that can eompliate
ow counterparties a ae
yenta eras. ater mah Fepiod YY. y Hes reopna in eatin
TS a case sy in efective,
stele interveabon by eeu:
ters to gt major payers 9 8
1 proviem tha several
ee but noe can 3
Inaiigaly: “These
ate the (pes of
fora mbere toe te
{ara almost ever
ftantinabl, for te
‘aya comes Inthe
Foidanee of nse
save Dash Ge
Sie erent Now Yk Fd ret
"Toe problem: The markt or oan
cial dei elie credit derivative,
Dariulriy 2 sain know as cet.
feta swaps, winch alow bens ana
‘ters co buy insurance again a bor
Foner going bus has growe 30 fast.
{hut cas overwbened te eg
‘Epub aed paper
| wn fim certain wi owes hat
| ta wnom a minor hleeup mgt be
| fea financial cy Wit Fer
|
‘Stson or te whole econ
‘eriratver allow bask saps
nue and iver ani tn
sins, muchas homeowners buy
tsrurane to st the ik of Pepa
Ine fre damage tt insurer athe
stipes: frm Jore Menlecurae
tne rows mon ata iterst
fale ha move up and ee With
Imaret rate anthem ra 4
‘ih Pants lover! ain
‘hh te pres ty « tes
fae aa 0B ps te arate
“he subspecies kn as cate
| taut wage tow wat thet Save
ie ney lose General Mote
orp shit Hn of sta Yo sk
Joie inves fos fe A ema
[hs ered aoa dawn span
fess at wel ts banks ohne ly
oti: venture now ice btak
Sty til tn be
Heed thre camer sar
|S 00 woe max x: wa
Street wo are eater
| fades themactt dare ang
Sifter yeas ap, ba eas wer
| tnt Strat ape oy teen
|
a ae eee
Beas cae
Fa eet
ieee
eaten
| eee eee ce
Soe Wheteees
Secon ete te
| eal wal rwtney arrng ot
fase overt he gets wb
SHAPE coe eee oe
et mone a ie
ey leured tha bead passe te
esbjein Seven cosh tout
‘oer a aera When 2a
| ew weed ha was was
| pomnitea” sage Gerald Corganc
lay god geno ta
sess" That's conta
Dank speak er: De et
Tsearening down the
a Mereay af mice
"a fe arent tt
‘et spine ook
ae
nner encourage
‘rent, Mr Corgan
Sndanuary an Te
fonvened aa Ina
‘Uy grup, eve be
ad care ar UTE poner
i problem. te APE, Nr. Celt?
iby led to song ealecive
Exnunment by the principal des
rs" In May, tien Fed Cmaman
‘lan Greenspan wae stgeny af
fing thet ee derivatives are Key
{0 tbe resiieny of be U8. econo,
autloned thatthe inadequate tte.
on ee
Re ee
a ea
ees ote
eee
cere
Secale
Hootie eae Ten Se
2 Oe
foe os ea ete
Soares ches
cou eee
ons
anew
me
cote
Sry coors ae
ng inetfici fie eh
SE ae
ate ena
ek eas
Soc ceneeee
tea a nt ares
santana ares
eee
pes
ee ees
soeieneatea st
Srnec.
Ei heater ae
het neo
» ey noi dealers wine gaye
serena» poston ta, someane else,
‘ormed stout arisptbey secrets
Sesto dearer: Bethy
‘leted 5 a
‘The Fourteer Famieraaa ame
"to retuee tne mbmbetolpage ean
phe a
Sep seb
“aah emectee
< Gimatent
shat he
Shae ened at
“impor, rece
Pairs osc ies joa
3Re alee reed es
Ta ae a a at
‘a nk tee Beak
thes ateenon pated
fet aa ee, nh
“The subspectes known nx eredit.de.’ “lmtusity by the regulators are invart:
tn Senpe le sis ane AY AE Seale es cn
(etcoy atten ry and alec i
CoS a inh a Pataca et lB
frien Ae nae a mt
eter ahah SERN need ge hem mw
Sat edie ee net et ae
a gemma lane i ee
seed rele oreo eb Breage
tro thea arden a
Inessage: Tell us how yout
A hee prone Br
Tats agreeon 4 way toh
Site saenten eed
oT i ee een
this when the marke stared aking Teles nlc before any party to 4
Paine fi mee sek Noe SI acs ane nat
kee eu ee ie al aa ee
‘and fax. Detailed eonfirmations, im- _ Bigicustomers tesisted demands that
todo taeda hy ly des any men |
‘ules later, weren't completed. One | |.285Signing a position to someone else, |
‘firm confessed in June that it had." it sharing thelr secrets:
18,000 tndocumented trades, several, “landiahout dealer eifciency, But Uhey
Ri eee es Acer oreene mee ken
Ing in the tate effiee foe more than... The Fourteen Fanuc also agreed
90 days. It wasn't unustial, to réduce.the number of trade contr. |
‘party deat was: Beaty ‘uurning obit atone a or as of
eas ae Sat at Ue
Simrarygcin mart cr Math het as
Ei ara
ees etd on eus
es en en ae eRe
fi cate ame a ee
st Popo eu fae
“Tran etatandng es fr
| ae eet Sires ey tama Sern is ete)
| ACGns RISA” Reem tice |
oslo sou tna edn ae ang tee at ey ere pee
[sa ges an Es rade and or pneg area ee stalctes! |
AS ete mt Binet ans
panreattcrce ey SME sent nome
Utena ach player knew Toe pi al rd here
auciitins oft apse ao” 4 bo of ote we
fe relied how expysed oe rms fire trades. Abt 49 bnew "|
Stiand fn frogie ETCMCe erat trades sil tent malened lero “|
‘tay was Inthe ease of crest deriva. cally. There's o centalized wily to |
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Hert etigedntenton and We UMM) aaa Feats ae on
fiber pect bac bon‘ opp the watt epacing fe pe bore
iit tem cdf seh en hey betta mere ae
fat une ing wih eho it" aking lian hy oe Me
Set teat Tati arty em ome pt ale fe
‘tig at nec re
Mata ested equation der ya ne a ata
Aes y are a gs won) WS eg ee
toler ea oe att io Cae