Spreading the word

Germany's Siemens Financial Services is an active user of credit default swaps to manage the risk associated with short-term trade receivables. Ralf Lierow, director of credit portfolio management, talks to Alexander Campbell

The credit derivatives market has witnessed tremendous growth over the past five years, with notional volumes rising by 55% to $8.42 trillion in the second half of 2004, according to the International Swaps and Derivatives Association. But corporates have so far played a minor role, with the market dominated by banks, hedge funds and insurance companies. However, Germany's Siemens Financial Services (SFS) has bucked the trend and uses credit default swaps (CDSs) to manage the risk associated