WASHINGTON -- Derivatives market participants may have experienced recent losses partly because the sophisticated models they use to gauge derivatives risks failed to accurately predict interest rate swings, a Federal Reserve Board governor said yesterday.

"Some of the models failed to provide the guide to [a] safe harbor because they assumed narrower swings in interest rates than actually took place," John P. LaWare told those attending the American Bankers Assocation's annual regulatory compliance conference here.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.