JCRA: A collapse in the cost of credit

Credit charges have dropped to pre-crisis levels, says consulting firm's CEO

Jackie Bowie, JCRA

Derivatives are cheap again. After rocketing during the financial crisis, recent months have seen costs collapse – specifically the spread charged by dealers to cover credit valuation adjustment (CVA), according to Jackie Bowie, London-based chief executive of JC Rathbone Associates (JCRA). This might be good news for hedgers, but it raises some troubling questions about whether banks, under huge revenue and competitive pressures, have sacrificed pricing discipline.

"In 2006 or 2007, for a three

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