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.

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