Are you sophisticated?

11 July 2010Articlesderivatives, Goldman Sachs, Henry PaulsonNick Dunbar

27 May 2010 The word 'sophisticated' gets used a lot in the world of derivatives. The dictionary defines the term as 'experienced, worldly, cultured; discriminating in taste or judgement, subtle, showing awareness of the complexities of a subject'. In high finance, it matters whether the definition is satisfied. "These were sophisticated investors" has become banks'…

Winner takes all

20 May 2010Articlesderivatives, financial innovation, hedge fundsNick Dunbar

Reading about the German government's abrupt decision to restrict sovereign credit default swaps, I was reminded of July 2009 when I met John Paulson at the New York offices of his eponymous hedge fund. I was prepared to be impressed. It isn't every day that you meet a man who has just made six billion…

My best ever scoop?

1 March 2010Articlesderivatives, eurozone, sovereign debtNick Dunbar

The pressure of a second draft deadline for my book was not quite enough to make me ignore the excitement about Goldman Sachs and Greece, especially since I was the one that broke the story six and a half years ago. You can read my reflections on the Goldman deal and its aftermath in this…

Weapons of mass deception

12 February 2009Articles, Comment, Risky Financederivatives, Italy, Life and Pensions magazine, Munich Re, Risky FinanceNick Dunbar

Risky Finance 22 November 2006 A rash of derivatives scandals a decade ago led to the tightening up of accounting rules for companies. But sadly not the same has been true of government accounting rules, at least in continental Europe. Both central governments and local authorities alike have become heavy derivatives users. This generates enormous…

A quant parable

12 February 2009Articlescredit derivatives, derivatives, quantitative analysisNick Dunbar

Risky Finance 27 November 2007 In the 12 months to July, Gordon Gekko was alive and well - running a fixed income business at a major bank. He was so busy scanning the CDO league tables and picking up awards at industry functions that he could no longer remember which of his many sports cars…

AIG, Dinallo and the Devil’s derivatives

12 February 2009ArticlesAIG, derivatives, Eliot Spitzer, Eric Dinallo, FSA, Martin SullivanNick Dunbar

29 October 2008 Risky finance:Â On January 18, 2008, the great and good from finance and politics mingled in an auditorium at New York University. There was New York's then governor Eliot Spitzer, along with his state senate and assembly supporters. The finance side included the leaders of New York's biggest financial institutions, led by…