Monday, September 28, 2009
According to Bloomberg, Nassim Nicholas Taleb said today:
To curb volatility in financial markets some financial products “should not trade,” including complex derivatives ... While products such as options are acceptable, he still doesn’t understand some derivatives after 21 years in the industry.Taleb joins George Soros and many others who have called for banning credit default swaps.
Paul Volcker and others have said that banks which receive taxpayer bailouts should not be heavily exposed to derivatives trading.
But Yves Smith says that the best approach would be to tax credit default swaps. She argues that that would shrink the CDS market - and the associated risks - faster than anything else.