EXCERPT The 2008 financial crisis presented two overt lessons: Lesson One is that the derivatives markets presents a systemic risk to national and world economies; Lesson Two is that the relative size of these markets is a fundamental risk to geopolitical as well as economic security. The numbers are indeed remarkable: the notional total value of the derivatives market at the end of 2012 was $694.4 trillion.1 Compare this to the $71.7tn global market value of the ‘real economy’ of goods and services, Gross Domestic Product (GDP), for 2012—just over one-tenth of the face value of the derivatives market, give or take a couple of trillion dollars. The notional value of directly-traded off-exchange derivative markets—Over-the-Counter (OTC) trading—alone amounted to $642.1tn, a sum about seven times greater than global GDP…