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Why are Derivatives Senior to Everything Else?

November 5, 2010

Derivatives get very special treatment.

Derivatives Still Special After Overhaul

Why is this the case? Why do these trades get precedence over any other thing in bankruptcy?

We will see more challenges of this law over the next few years. This cannot stand and is one of the major reasons we have so much trading in the world. When you get special treatment, people respond to incentives.

 

 

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