This has helped to resolve issues related to the impact of bankruptcy or insolvency on transactions and netting contracts, reducing the potential for contractual disputes between market participants. These efforts are continuing through various industry groups, and the legal profession is making important contributions to improving the legal certainty of these instruments.
Derivatives and other risk-transferring instruments have a salutary effect on the financial markets by facilitating more-liquid and more-efficient transfers of risk, creating the potential for greater economic efficiency through diversification benefits. Innovation in financial risk management inevitably will continue.