'Big bang' protocol provides wake-up call for CDS market over credit event settlement

The credit derivatives industry is set to introduce profound changes to the way it works in the coming few weeks, as bilateral decision-making on credit events is replaced by a centralised system of adjudication. By signing a so-called "big bang" protocol, adherents will agree to settle existing trades through centrally administered auctions for any future credit event.

Cash settlement auctions are a well-established feature of the credit derivatives market, but using them has until now been

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