Good Derivatives A Story of Financial and Environmental Innovation

by Sandor, Richard L; Coase, Ronald

• ISBN13: 9780470949733
• ISBN10: 0470949732
• Edition: 1st
• Format: Hardcover
• Copyright: 2012-04-03
• Publisher: Wiley

Summary

The Good Sorcerer will be the story of financial creativity in the last 40 years and how financial innovation can be harnessed to combat the world's environmental problems. Known as "the father of financial futures," author Richard Sandor has been on the forefront of financial innovation since the early 1970s, when, as a young economist he developed interest rate futures contracts at the Chicago Board of Trade. Subsequently, Sandor helped create catastrophe bonds (to mitigate weather risk), and the sulfur dioxide trading system to reduce acid rain. In the book he will explain the process of creating new financial products and the equally important process of "pioneering" products to achieve widespread usage in the financial industry. Describing both his successes and failures, Sandor will provide unique insights into financial innovation, the globalized financial markets, and the bumpy road of the innovator. Sandor will also discuss the vision behind the Chicago Climate Exchange and how he believes it will play a critical role in reducing the world output of greenhouse gases. Sandor argues that market-based trading systems are a far more effective means of reducing pollutants than "command-and-control" dictates, and such trading systems ultimately may help find solutions to global water shortages, rainforest destruction, and endangered species. Filled with provocative ideas fascinating stories, and valuable lessons, The Good Socerer provides a snapshot of recent financial history and a vision of where we're headed.

Author Biography

Richard L. Sandor is Chairman and Chief Executive Officer of Environmental Financial Products LLC, which specializes in inventing, designing, and developing new financial markets with a special emphasis on investment advisory services. EFP was established in 1998 and was the predecessor company and incubator to the Chicago Climate Exchange (CCX), the European Climate Exchange (ECX), and the Chicago Climate Futures Exchange (CCFE). Dr. Sandor was honored by the City of Chicago for his contribution to the creation of financial futures and his universal recognition as the "father of financial futures." In October 2007, he was honored as one of Time magazine's "Heroes of the Environment" for his work as the "Father of Carbon Trading." Dr. Sandor is a Distinguished Professor of Environmental Finance at Guanghua School of Management at Peking University and a Lecturer in Law at The University of Chicago Law School.

Table of Contents

Foreword ix
Preface xiii
Acknowledgments xxi
The Early Years	p. 1
Trying to Change the World	p. 23
The Berkeley Years	p. 47
The Chicago Board of Trade Years: The Commodity Futures Contract	p. 65
The Chicago Board of Trade Years: Financial Futures Contract	p. 89
Educating Users and Building the Market	p. 125
Treasury Bond and Note Futures	p. 139
The Decade of the Eighties	p. 167
Globalizing Chicago Exchanges	p. 191
Environmental Finance	p. 205
Blame It on Rio	p. 223
The Beginning of the Entrepreneurial Years	p. 239
YouâÇÖre Gonna Trade What?	p. 265
From the Pit to the Box	p. 291
Conceiving a New Kind of Exchange	p. 313
The Twenty-First Century Lighthouse	p. 327
CCX Market Architecture	p. 351
Chicago Climate Exchange	p. 375
The Rise of the Chicago Climate Exchange	p. 393
The Fall of the Chicago Climate Exchange	p. 413
The Chicago Climate Futures Exchange	p. 429
The European Climate Exchange	p. 453
India	p. 479
Opening New Markets in China	p. 501
Good Derivatives	p. 533
Appendixes	p. 559
Acronyms	p. 575
Glossary	p. 577
Index	p. 593
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