While the leveraged nature of derivative instruments poses risks to individual investors, derivatives also provide scope for a more efficient allocation of risks in the economy, which is beneficial for the functioning of financial markets, and hence enhances the conditions for economic growth.
1  BIS Review 100/2000  Among the many changes in global financial markets, developments in the euro area have been particularly striking. Recent trends in euro area financial markets The launch of the euro on 1 January 1999 was a historic event. Eleven national currencies were converted into one single currency overnight.