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irect cause of Bubble Economies.
And finally, it is the complexity of financial derivatives. Financial derivatives designers often use various mathematical models, break down the various elements, and combine them to develop complex financial derivative products during the process. But these products are very difficult to understand and master for the common non-professionals. At the meanwhile, the processes of personnel to operate the business are also prone to error. As we have seen the financial crisis, a variety of structurally complex derivative products of large risks increase the difficultly for investors to identify the risks, and thus resulting in the weakness of market discipline.
 
2.2 Financial derivative market
2.2.1 Formation of financial derivative market
2.2.1.1The number of transactions and size of financial derivatives
Derivative market is a financial market that deals with the trading of derivatives .Derivatives can be traded through futures or Over-the-Counter. The trades of financial derivatives appeared in 1970s. In May 16, 1972, the branch of the Chicago Mercantile Exchange -International Monetary Market, managed six currency futures contracts in the first time, including Pound, Canadian dollar, Deutsche mark, Japanese yen, Swiss franc and Australian dollar. So the world’s first international trading currency futures market established. Later, all the financial futures came out one by one, including currency futures, interest rate futures, stock index futures. Till that time, a new financial market-Financial Futures Market, appeared and developed rapidly all over the world.
 
2.2.1.2 The global financial derivatives market system
As the birthplace of a number of derivatives, the United States has the largest share of financial derivatives transactions. America has two major exchanges trading in financial derivatives. One is Chicago Futures Exchange that founded in 1984, which is the oldest and largest Futures Exchange in the world. The other is the International Monetary Market. It is the largest Financial Futures Market that operating currencies, gold and other financial instruments.
Recently, the financial derivative market in Europe and Asia developed rapidly, presenting a strong challenge to the hegemonic position of North America. There are more than fifty Futures Exchanges in the world now, and these exchanges launched different kinds of new financial derivatives with their own characteristics.
 
2.2.2    Development of financial derivative market.
2.2.2.1The innovation of financial derivatives
Financial derivatives transactions gradually became the protagonist in the international financial market with the development of Financial Futures and Options Market and more and more frequent application of interest rate, currency swaps and forward foreign exchange transactions and other means of transaction. Especially after 1990s, financial derivative market has expanded rapidly and the trading volume increased sharply (Russo T, 1994).
There are more and more varieties of global financial derivative transactions.
From 1980s, the varieties of global financial derivative transactions have been innovated constantly, especially in the country and regions with well-developed finances 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。