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84 Geo. L.J. 2319 (1995-1996)
Illiteracy and Intervention: Wholesale Derivatives, Retail Mutual Funds, and the Matter of Asset Class

handle is hein.journals/glj84 and id is 2339 raw text is: ARTICLES Illiteracy and Intervention: Wholesale Derivatives, Retail Mutual Funds, and the Matter of Asset Class* HENRY T. C. Hu** TABLE OF CONTENTS I. ERROR AND REDEMPTION ............................... 2320 II. ASSET CLASS AND THE WHOLESALE MARKET: OTC DERIVATIVES .............................................. 2326 A. A TYPOLOGY OF INTERVENTION: THE NO-LYING BASELINE AND BEYOND ........................................ 2326 B. SOME RECENT EXPERIENCE ........................... 2333 1. Bankers Trust: First Generation ................... 2333 a. The Courts: Genesis ........................ 2333 b. The Regulators: The Localized Response ......... 2336 2. The Regulators: Guidelines of General Applicability .... 2339 a. Office of the Comptroller of the Currency Banking Circular 277 .............................. 2339 b. Framework for Voluntary Oversight ............. 2341 c. Principles and Practices for Wholesale Financial Market Transactions ........................ 2342 * Copyright © 1996 by Henry T. C. Hu. All rights reserved. Without limiting the generality of the foregoing, no permission is granted for copying this article or any portion hereof for classroom use or for any other purpose. ** Marrs McLean Professor in Law, School of Law, University of Texas at Austin. B.S. 1975, M.A. 1976, J.D. 1979, Yale University. This article is based in part on my presentations at colloquia or other meetings hosted by, among others, IBC Financial Focus (London, December 1994), International Swaps and Derivatives Association (Washington D.C., February 1995), Vanderbilt's Graduate School of Management (Nashville, April 1995), the Risk Management Center (Chicago, June 1995), the BAI Foundation (Chicago, August 1995), and the Studienzentrum Gerzensee (Gerzensee, October 1995). I have benefited substantially from the comments of meeting participants, the library expertise of David Gunn, and the research assistance of Diane Brayton, David Brooks, S. Bliss Burdett, Barry Newberger, Christopher Sgarlata, William Creighton Smith, and Robert K. Williams. Unless expressly indicated otherwise, this work speaks as of May 15, 1996. The work was substantially complete before the May 8-9, 1996 opinion and settlement relating to the litigation between Procter & Gamble and Bankers Trust. 2319

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