Interpreting Smoke Signals

The Economist Magazine Staff
July 21, 2006

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The people who run the Montreal Exchange know all about risk. What began life as a market for penny stocks in a mining boom in the 1870s now deals exclusively in derivatives, an asset class known for its volatility. This month, the exchange announced plans to start trading credits for carbon-dioxide emissions, a scheme modelled on the Amsterdam-based European Climate Exchange set up last year. But the government regulations and registry of companies needed to make a climate exchange work do not yet exist in Canada. The exchange's bet is that they will appear this autumn, when Stephen Harper, the …

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