Policy makers are contemplating restrictions on the shorting of government, including a ban on the (naked) short-selling of government bonds, and derivatives related to those bonds. Sovereign issuers and primary dealers have expressed their unease about the potentially adverse impact, or...

Before the onset of the ongoing credit crisis I concluded that the available evidence supported the notion that financial markets were (significantly) underpricing risk . It will be argued in this paper that inherent (or structural) difficulties in the pricing of all sorts of risks is an...