JP Morgan credit derivatives usage boosts loan hedging

JP Morgan has stepped up hedging activity on its $455.1 billion loan book, increasing its use of credit derivatives by 32% to $38.7 billion notional value in the three months to June. The bank joins a growing list of firms that are taking advantage of tight credit spreads by increasing their hedging, at a time when some analysts are predicting that the credit cycle may be turning.

JP Morgan refused to comment on its hedging policy, but the bank is not alone in preparing for a higher risk of