Eyes on the storm

The World Bank is busily marketing derivatives to governments to hedge them against major risks to their economies such as catastrophic weather. Is this a viable option for emerging market economies? By Alexander Campbell

For most of the world's population, risk is not merely a financial concept. Catastrophic events, such as hurricanes, earthquakes or drought, can not only bring monetary damage, but hunger, disease and death - and can even shake the foundations of national governments. Global climate change is expected to increase the frequency of extreme weather events, which will inevitably hit the poor countries of the tropics hardest.

Storms such as Hurricane Katrina in 2005 make the headlines because of their