In recent years, assets of nonbank financial intermediaries (NBFIs) have grown significantly relative to those of banks. These two sectors are commonly viewed either as operating in parallel, performing different activities, or as substitutes, performing substantially similar activities, with...

Derivatives are often described as “financial weapons of mass destruction” and condemned as a “cause” or “trigger” of the recent financial crisis. The purpose of this article is to demonstrate that these epithets are misleading and false, respectively