CDS spreads tighten after central bank efforts

The Credit Derivatives Research (CDR) Counterparty Risk Index, which averages the credit spreads of the 15 largest credit derivatives dealers, dropped to 389.8 basis points yesterday from an all-time high of 419bp the day before.

The cost of protection on Morgan Stanley, which is believed to be in merger talks with several institutions, including Wachovia, tightened to 865.8bp yesterday compared with a closing level of 997.9bp the day before, according to Bloomberg. CDSs on American

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