Keeping up with credit derivatives

Technical

With rating agencies reporting larger numbers of corporate debt defaults and credit downgrades, the already high profile of credit default swaps as a mechanism for firms to protect their exposure to credit markets has only increased. In less than a decade since the product’s inception, credit derivative volume has grown to nearly one trillion dollars. The International Swaps and Derivatives Association (Isda) reported in its Market Survey that credit default swap volume rose by 45% i