Derivatives exposure 'small'

BRITAIN's futures and options specialists yesterday attacked US calls for greater controls over derivatives as ill-conceived, saying worldwide exposure was relatively small, writes Peter Rodgers.

Michael Jenkins, chairman of the trade body, the Futures and Options Association, said calls last week by the US General Accounting Office for an international tightening of regulation ran 'directly against the views of regulatory authorities and banks around the world'. He urged greater reliance on self-regulation and internal controls.

Mr Jenkins said the face value worldwide of derivatives contracts of between dollars 10,000bn and dollars 16,000bn was not related to exposure, which was 'probably quite small, certainly when compared with the exposure generated as a result of real estate lending and Third World loans'.

Speaking on the eve of an international conference on futures and options, Mr Jenkins said compliance with recommendations last year by the Group of 30, a think-tank for financial markets, would have kept recent highly publicised losses by derivatives investors at an acceptable level.