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Financial weapons of mass destruction: Brexit and the looming derivatives threat

If these risky financial assets get tangled up in the Brexit crunch, the consequences will be felt far beyond the square mile

By Jay Elwes  

Photo: Matt Crossick/Matt Crossick/Empics Entertainment

In a letter to shareholders written in 2002, Warren Buffett, by all accounts one of the greatest moneymen in history, issued a warning. There was one financial asset traded on world markets that was making him worried, and in reaching for a metaphor, he didn’t hold back. “Derivatives,” Buffet wrote, “are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

When Buffett wrote those words, the total value of all derivatives in existence was $142 trillion. In the years that…

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