|
From ATCA Credit Default Swaps The increasingly large dark cloud looming on the financial
markets horizon is the threat of Credit Default Swaps (CDS)
derivatives risk, which is likely to dwarf the sub-prime crisis when
in full play. The global market for CDSs has rocketed over the past
four years as they have been widely utilised by the thinly
capitalised off-balance sheet vehicles created and/or utilised by
large financial institutions -- banks, insurance and reinsurance
groups, hedge and investment funds. The total amount of outstanding
CDS derivatives' trades worldwide is notionally USD 46 trillion.
This CDS market dwarfs the markets in US stocks (USD 22 trillion),
mortgage securities (USD 7 trillion) and US treasuries (4.5
trillion).
|
