Traders move on and markets forget. Venerable truisms are especially applicable in derivatives trading. But it seems this time, institutions have absorbed some of the lessons of the Asia crisis for the long term. Whether they have really done so will be borne out by the behaviour of the market in future times of stress.
At the start of 1998, the markets were still in the throes of the Asian crisis, which had blindsided market participants and then kept them guessing as to what would be the knock-on effects. Then came the volatility of autumn 1998, the debate about the role of hedge funds, leverage and regulation.
Last year saw Asian markets come...
