Griffin Warns Against Status Quo in OTC Derivatives Market

It is quite normal to forget painful lessons learned from the past. However, Kenneth Griffin, Founder of Citadel Investment Group and its Chief Executive urge everyone including the government not to forget what happened in the past.

When Long Term Capital Management collapsed more than 10 years ago, the need for derivatives market reform was highlighted by a government report. With the passage of time, Kenneth feels that the impetus has receded.

In August, the Obama government did propose reforms for the $ 600,000 OTC derivatives market, observes Kenneth, who was writing for FT. He however notes that, to protect their profits, merchant bankers are lobbying for status quo. He wants regulated clearing houses to handle the clearing of standardized derivatives.