To every action there is always opposed an equal reaction.
The second half of the Eighties was characterized by great optimism for and growth of financial innovations. The child of the Seventies was healthy, making friends and learning fast. New innovations in the form of index futures proved to be a big success. With increasing maturity of financial futures contracts, a whole new field of asset management thrived. Banks were reinventing their roles with new financial products and services. Triggered by structural economic shifts in the Far East, financial innovations were also becoming increasingly prevalent in Asia. The first hint of a global market for financial futures seemed to be on the horizon.
Keeping pace with these changes, the CME was emerging as a major force in the futures industry. The CBOT made a courageous foray into 24-hour trading. Drexel, an obscure investment bank, was embracing innovative ways to finance entrepreneurs. I remained cautiously optimistic about all of this change and continued to expound on the value of good derivatives. Soon, the world would witness a series of disconcerting events that exposed the major shortcomings in the financial industry. This is that story—one of global expansion of the Chicago Brand.
I joined the CME board in 1983. With the introduction of the currency futures and later S&P index futures, the CME was transforming itself from an eggs and ...