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The Commodity Futures Modernization Act (2000)removed Derivative Securities,such as CDSs,from

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Essay

The Commodity Futures Modernization Act (2000)removed derivative securities,such as CDSs,from regulatory oversight.This change opened the door for speculators to bet on the health of a company or pool of assets,and was certainly a culprit in the 2007-2009 financial crisis.Why did Congress pass such legislation?


Definitions:

Recession Year

A year during which an economy experiences a downturn and reduced economic activity for two consecutive quarters or more.

Rate of Inflation

The velocity at which the cumulative price level of goods and services elevates, thereby diminishing the purchasing capability.

Cyclical Unemployment

Unemployment caused by the cyclical trends in the economy, typically increasing during recessions and decreasing during periods of economic growth.

Overall Unemployment Rate

The amount of the workforce that remains unemployed and is actively on the lookout for employment.

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