In 1994, municipalities across the United States suffered hundreds of millions of dollars in losses from their investments in derivatives. Commentators swiftly blamed the crisis on a variety of villains, including unscrupulous brokers, rogue investment officers, and uninformed or unsophisticated treasurers and municipal decisionmakers. Based on this diagnosis, industry experts, government regulators, and academic commentators proposed a host of different options designed to avert future crises in derivatives investments.
Jay L. Koh,
The Myth of Procedure: Derivatives Investment Reform in St. Petersburg,
Yale J. on Reg.
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