Credit default swaps (CDS) were stigmatized for their role inthe financial crisis, but a new exchange-traded version may breathelife back into the notion of CDS as a tool that companies can useto analyze and potentially hedge credit risk.

“Anything we can do that sheds more light on corporate liquidityand credit is fabulous,” says Jerry Flum, CEO of CreditRiskMonitor,which provides real-time financial analysis and news.

Both the Chicago Board Options Exchange (CBOE) and the ChicagoMercantile Exchange launched credit default products in 2007, justas the financial crisis was beginning to unfold. The products nevergot off the ground, partly because CDS were named a factor in theglobal financial meltdown and the collapse of AIG and otherfinancial giants, and partly because the exchange-traded productswere difficult to customize to users' needs.

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.