Capital-at-risk products with European-style barriers inherently more vulnerable in a downturn
Renewed interest in gap risk trades might resurrect the defunct trading channel previously used by structured products issuers as a means to recycle unwanted gap risk, say dealers.
Credit default swaps (CDSs) referenced to financial services and telecommunications firms were the most active in the global credit default swap market in January, according to New York-based interdealer broker GFI.
The cost of implementing Basel II could put banks at a competitive disadvantage compared with non-banks, and spur them to ‘de-bank’ to avoid this regulatory burden. Harry Stordel and Andrew Cross say regulators must look at the provisions from a cost/benefit...