uly 15 (Bloomberg) -- A new financial crisis will develop from the failure to effectively regulate derivatives and the extra global liquidity from stimulus spending, Templeton Asset Management Ltd.'s Mark Mobius said. "Political pressure from investment banks and all the people that make money in derivatives" will prevent adequate regulation, said Mobius, who oversees $25 billion as executive chairman of Templeton in Singapore. "Definitely we're going to have another crisis coming down," he said in a phone interview from Istanbul on July 13. ..... Mobius didn't explain what he thought was needed for effective regulation of derivatives, which are contracts used to hedge against changes in stocks, bonds, currencies, commodities, interest rates and weather. The Bank for International Settlements estimates outstanding derivatives total $592 trillion, about 10 times global gross domestic product. Looming Crisis "Banks make so much money with these things that they don't want transparency because the spreads are so generous when there's no transparency," he said.
"Political pressure from investment banks and all the people that make money in derivatives" will prevent adequate regulation, said Mobius, who oversees $25 billion as executive chairman of Templeton in Singapore. "Definitely we're going to have another crisis coming down," he said in a phone interview from Istanbul on July 13. ..... Mobius didn't explain what he thought was needed for effective regulation of derivatives, which are contracts used to hedge against changes in stocks, bonds, currencies, commodities, interest rates and weather. The Bank for International Settlements estimates outstanding derivatives total $592 trillion, about 10 times global gross domestic product.
Looming Crisis
"Banks make so much money with these things that they don't want transparency because the spreads are so generous when there's no transparency," he said.
The Bank for International Settlements estimates outstanding derivatives total $592 trillion, about 10 times global gross domestic product. "Life shrinks or expands in proportion to one's courage." - Anaïs Nin
