Sunday, April 20, 2008

Credit Default Swap Market still growing

Clearing the fog
Apr 17th 2008 NEW YORK AND VIENNA
From The Economist Credit derivatives continue to boom, but the old order is under threat
BANKERS gathering in Vienna this week for the annual bash of the International Swaps and Derivatives Association (ISDA) had some big numbers to celebrate. The overall market for over-the-counter derivatives shot up to $455 trillion at the end of 2007. Some $62 trillion of that were credit-default swaps (CDSs), whose supercharged growth continues in spite of the crunch. But the emphasis this year was as much on playing down dangers as playing up volumes. ISDA was quick to point out that actual credit exposure was a mere 2% of the notional value of all contracts

Norton's comments: Last I heard it went from about 20 trillion to 40 trillion; now it is $62 trillion. And this is the unregulated market that is like many derivatives hard to value the instruments? Where is the renewal of faith here for the public?

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