Derivatives Timeline: A History of Financial Fiascos

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Note: Derivatives weren’t the sole cause of the financial crisis, but they were one crucial factor. The evidence in the timeline below demonstrates that without change, we’re bound to see more derivatives-ignited fiascos. If too many of these fiascos occur at once, we’ll risk experiencing another crisis.

Critics might take issue that we use the word “gamble” here, but given the uber-speculative nature of these transactions, we feel it’s merited. We also recognize that there are many types of derivatives and that the timeline here only focuses on the more dangerous types.

derivatives timeline

As we’ve stated elsewhere, we’re not calling for endless pages of regulation and red tape. The financial industry has been flooded with thousands of pages of regulation—much of which ends up hurting smaller lenders. Instead what we need are a few simple reforms to make derivatives transparent. We also need to ban a few of the more egregious derivatives trades (including credit default swaps).

While all derivatives aren’t harmful, the sheer scale and opacity of this market means that our economic future will continue to be fragile unless we demand reform and protest firms that engage in these practices by switching from them.

Also see: What are derivatives and why are they dangerous.


Wendy Gramm (source for quote)
Nick Leeson
Larry Summers (quote #1quote #2)
Brian Hunter
Alan Greenspan (quote #1quote #2)
Joe Cassano (source for quote)
Howie Hubler
Bruno Iksil

Lehman Brothers
MF Global

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One comment on “Derivatives Timeline: A History of Financial Fiascos
  1. igmuska says:

    Banks should also not pay themselves commissions on depositors’ money when lining up these derivatives; all depositors’ money must be left alone other than account maintenance fees. Ownership of depositors’ money must remain with the depositors or risk having depositors keep their money in their mattress

6 Pings/Trackbacks for "Derivatives Timeline: A History of Financial Fiascos"
  1. [...] Wall Street to Congress to eventually affect each of us. (After all, the bill loosens rules on derivatives trades, which were at the heart of the financial [...]

  2. [...] more on derivatives, see our derivatives timeline and our post “What Are Derivatives, and Why Are They [...]

  3. [...] Financial Crisis Reading List What Are Derivatives, and Why Are They Dangerous? A Derivatives Timeline Break Up The Banks Already Our Too Big To Fail [...]

  4. [...] wrote about derivatives in our last post and in our derivatives timeline. In this post, we’ll delve into the most pernicious iteration of derivatives: credit default [...]

  5. [...] gotten bigger, the logic of too big fail even more deeply embedded. … There is, I fear more crisis to come. (p [...]

  6. [...] more, the 21st Century Glass-Steagall Act of 2013 will make it so banks cannot gamble with derivatives using depositor’s money like they do today. Currently, anyone who has money at banks like [...]

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