Private and Public Controls in the Over-the-Counter Derivatives Market, 1984-2015

2015 ◽  
Author(s):  
David P. McCaffrey
Author(s):  
Craig Pirrong

Over-the-counter derivatives were widely blamed for causing or exacerbating the financial crisis. As a result of perceived structural failings in these markets, legislators and regulators mandated substantial changes. The most notable of these changes was a requirement that most derivatives be centrally cleared. Under clearing, a central counterparty becomes a party to all contracts and guarantees performance on them. These mandates were predicated on a defective understanding of the economics of derivatives markets. The proposed reforms were fundamentally flawed because they were rooted in an institutional, rather than functional, approach to regulation.


2020 ◽  
Vol 15 (4) ◽  
pp. 1669-1712
Author(s):  
David M. Arseneau ◽  
David E. Rappoport W. ◽  
Alexandros P. Vardoulakis

We show that trade frictions in over‐the‐counter (OTC) markets result in inefficient private liquidity provision. We develop a dynamic model of market‐based financial intermediation with a two‐way interaction between primary credit markets and secondary OTC markets. Private allocations are generically inefficient due to a congestion externality operating through market liquidity in the OTC market. This inefficiency can lead to liquidity that is suboptimally low or high compared to the second best, providing a rationale for the regulation and public provision of liquidity. Moreover, our model characterizes a transmission channel of quantitative easing or tightening that operates through liquidity premia.


2017 ◽  
Vol 2017 (033) ◽  
Author(s):  
David M. Arseneau ◽  
◽  
David E. Rappoport ◽  
Alexandros P. Vardoulakis ◽  
◽  
...  

Author(s):  
G.A. Miranda ◽  
M.A. Arroyo ◽  
C.A. Lucio ◽  
M. Mongeotti ◽  
S.S. Poolsawat

Exposure to drugs and toxic chemicals, during late pregnancy, is a common occurrence in childbearing women. Some studies have reported that more than 90% of pregnant women use at least 1 prescription; of this, 60% used more than one. Another study indicated that 80% of the consumed drugs were not prescribed, and of this figure, 95% were “over-the-counter” drugs. Acetaminophen, the safest of all over-the-counter drugs, has been reported to induce fetal liver necrosis in man and animals and to have abortifacient and embryocidal action in mice. This study examines the degree to which acetaminophen affects the neonatal liver and kidney, when a fatty diet is simultaneously fed to the mother during late pregnancy.Timed Swiss Webster female mice were gavaged during late pregnancy (days 16-19) with fat suspended acetaminophen at a high dose, HD = 84.50 mg/kg, and a low dose, LD = 42.25 mg/kg; a control group received fat alone.


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