In 1989 a nervous district auditor pulled the plug on the Hammersmith and Fulham Local Authority’s massive swaps book. This was just the start of the notorious Hammersmith and Fulham debacle. The subsequent default and legal battle, which ultimately involved more than 130 UK local authorities and 75 ... click here for more details.

If size is important in derivatives disasters, then forget Metallgesellschaft, Procter & Gamble and even Barings Bank. The unauthorized trader who made the biggest splash is Yasuo Hamanaka. As Sumitomo Corporation’s star copper trader, he was known as “Mr. Five Percent,” after the amount of the world’s copper ... click here for more details.

Derivatives disasters have not been the exclusive preserve of the loosely regulated over-the-counter markets. Despite the supposed safety provided by clearing houses and reporting requirements, exchange-traded derivates can also be catastrophic in the wrong hands- such as those of Nick Leeson. In February 1995, Leeson brought down Barings, ... click here for more details.