Fukushima and Derivatives Meltdowns
Many financial commentators have likened Japan’s nuclear catastrophe to the 2008 financial meltdown. But, while the resemblance between these crises is clear enough – each activity yields big benefits and a tiny but explosive risk – it ends where preventing their recurrence begins.
CAMBRIDGE – Financial commentators have likened Japan’s earthquake, tsunami, and nuclear catastrophe to derivatives’ role in the 2008 financial meltdown. The resemblance is clear enough: each activity yields big benefits and carries a tiny but explosive risk. But the similarity between the two types of crisis ends where preventing their recurrence begins.