Heard on the Street

Greece Shows Need For Derivatives Reform

Updated Feb. 16, 2010 12:01 a.m. ET

How many more crises will it take?

The Greek emergency is a reminder of how little has been done to fix large, potentially unstable parts of the financial system. One motive for the European Union to intervene was to avoid banks taking losses on loans made in countries like Greece, Spain and Portugal. But banks also may have been exposed through derivatives contracts with the governments of fiscally weak European states.


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