May 31, 2006

Some properly documented could be even worse

Sir, May 31, you report “Errors in complex derivatives trade doubled last year” and you state “The surge in errors comes as dealers struggle to clean up market practices under pressure from regulators, who worry over . . . if transactions are not properly documented” but sure you must be meaning “The surge in the discovery of errors”. That said let us not also forget that even more dangerous for the market could be all those operations that though properly documented, are executed as acts of faith by the so many agents that currently are really not sure of what they’re up to.

Sent to FT May 31, 2006