Research is essential to all investors, and when a market is complex and opaque it can become a critical determinant of success. Lack of transparency has burnt a number of investors in synthetic collateralised debt obligations (CDOs). Ratings arbitrage, credit substitution rights and adverse selection are just some of the problems that have troubled the buy side.
A handful of dealers now produce regular credit derivatives research. But most end-users Risk spoke to reported that one f
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