Many speakers noted that derivatives continue to suffer from a public relations problem with mainstream attention on the instrument usually focusing on the instruments' role in scandals such as Enron. Kaushik Amin, ISDA board member and managing director and co-head of global interest rate products at Lehman Brothers, noted that much of the concern regarding derivatives points to the notional size of some USD140 trillion. This figure, however, does not take into consideration such things as netting, which if considered would lower the total size to around USD20 trillion. Such a size is comparable to the bond market and is not such a big deal, he said.
Mainstream commentary has similarly failed to address the role of derivatives in successfully hedging market risks, said Amin. Last June was the worst performing month for bonds on record, however, in spite of this volatility there was no evidence of any problems in hedging and hedge funds didn't blow up as a consequence, he said.
