The Law and Structure of the International Financial System: Regulation in the United States, EEC, and Japan

By John H. Friedland | Go to book overview

3
Systemic Risk and Intermarket Regulations In US Securities and Derivative Markets

Financial innovations in the banking sector, such as securitization, have been accompanied by innovation in the securities markets and include stock options strategies and the phenomena of stock index futures. These securities market innovations, that usually involve simultaneous trading in principal and derivative markets, provide the focal points of this chapter.

Since the market break of 1987, efforts have been made to improve clearing and payment systems, to prohibit brokers from "front running" clients' orders and engaging in other forms of market manipulation, to provide for intermarket cross-margining arrangements that potentially reduce gridlock and to institute circuit breakers. At the same time, little has been done to change the basic regulatory apparatus or to consider the relationship of financial market structure to the underlying economy.

Part I discusses the idea of a single regulator for securities and derivative markets. Part II considers clearance and settlement systems, differentiating securities and index future clearing and discusses foreign exchange issues. Part III considers the impact of futures exchanges on market volatility; and Part IV examines net capital rules for stocks and futures. Part V discusses the use of circuit breakers; and Part VI considers the broader issue of futures trading practices and investment horizons. Part VII concludes that subtle long-term issues have not been addressed in spite of the technical proficiency employed in dealing with clearance, payment and settlement issues.


Part I: The Single Regulator

After the 1987 market break, a presidential task force (the Brady Commission) was charged with investigating the break. The Brady Commission concluded that the prospect of clearing house failures reduced the willing

-117-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
The Law and Structure of the International Financial System: Regulation in the United States, EEC, and Japan
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen
/ 204

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.