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28% Strongly Agreed 2). 53% Agreed 3). 18% Somewhat Agreed 4). 1% Somewhat ...

28% strongly agreed
2). 53% agreed
3). 18% somewhat agreed
4). 1% somewhat agreed
The respondents indicated the derivative use by companies represented a cost effective means via which the transfer of risk is accomplished and that the contribution of derivatives aid in the stability of the global financial system.
The risks of derivatives have been overstated.
81% agreed with this statement
1). 9% strongly agreed
2). 37% agreed
3). 35% somewhat agreed
4). 10% somewhat disagreed
5). 9% disagreed
The results of the preceding survey aid in putting the worth, and impact of derivatives into overall perspective. Given that 99% of college professors see derivatives as beneficial to the global financial system, and that 81% think the risks of derivatives has been overstated, the beneficial effect seemingly is positive.
The global financial system since the mid 1990s has experienced periods of high asset price volatility, which derivatives have helped to stabilize as a result of the unique approaches to writing debt, which in many cases is just forestalling a deeper problem still seeking a solution (Barham, 2001, pp. 40-43). During the period since the mid 1990s, the global financial markets have been characterized by asset pricing, and capital flows volatility, which has raised the issue of how emerging market financial, and economic systems, a major contributor to the growth in derivative use, can be made to be more resilient with respect to such volatility (Calvo, 1998, pp. 35-54). The case for the beneficial effects of financial derivatives in emerging market volatility represents one of the positive impacts that these types of instruments have, and are having in their contribution to international finance.
The mid and late 1990s, as well as into 2000, and beyond has seen this volatility grow during this period along with the inclusion of what are termed ‘sudden stops' or in some cases reversals of capital flows that represented key features of the most severe banking, and balance of payments crisis (Calvo, 1998, pp. 35-54). Examples of the preceding can be found in the crisis in Mexico in 1995 as well as the Asian crisis that occurred in 1997 (Calvo, 1998, pp. 35-54). Important elements within the preceding were represented by the problems in the banking system's debt servicing difficulties as represented by large domestic corporations with huge debts in foreign currency (Calvo, 1998, pp. 35-54). The aforementioned ‘sudden stops' reflected concerns on the part of investors regarding the weaknesses in political as well as economic financial systems of emerging markets that impacted upon investor appetites' for risky assets (Calvo, 1998, pp. 35-54). The foregoing, when lumped together, all contributed to a reduction in the ability of emerging markets to access international financial markets (Calvo, 1998, pp. 35-54).

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