Sebastian Faulks Quotes
Life can be lived at a remove. You trade in futures, and then you trade in derivatives of futures. Banks make more money trading derivatives than they do trading actual commodities.
Faulks, Sebastian. A Week in December. Hutchinson, 2009.
It was the souped up nature of the credit default swaps that was in part responsible for the souped up melt down of the economy of 2008 and the great recession thereafter. A credit default swap is an insurance policy that a company will pay off its bonds and not go bankrupt. It is a cross between an insurance mechanism and a stock exchange type security mechanism and through heavy lobbying escaped any kind of regulation. It cost a company no money to write a credit default swap and they were paid to do so. As long as business and the economy was good, it was a terrific business but there was no way of ever knowing how much risk they were taking. So companies who wrote credit default swaps did not have to have the money to pay to back them up if they business was bad. When that happened in 2008 even the largest insurance company in the world collapsed because of the risk of having to pay the credit default swap and the U. S. Government had to take over the insurance company. In 2010, the Obama administration passed a financial reform bill that began to regulate credit default swaps.
Sebastian Charles Faulks CBE FRSL is a British novelist, journalist and broadcaster. He is best known for his historical novels set in France – The Girl at the Lion d'Or, Birdsong and Charlotte Gray. He has also published novels with a contemporary setting, most recently A Week in December (2009) and Paris Echo, (2018) and a James Bond continuation novel, Devil May Care (2008), as well as a continuation of P.G. Wodehouse's Jeeves series, Jeeves and the Wedding Bells (2013). He was a team captain on BBC Radio 4 literary quiz The Write Stuff.
