Synthetics up on back of credit derivatives growth

The agencies expect a sizeable increase in the synthetic securities market this year, following high growth levels in 2001. Greater investor sophistication and decreasing yields in traditional investments are also driving the increase.

Alain Carron, a director at the S&P structured finance ratings group, said the increased familiarity with credit derivatives, which allow institutions to synthetically transfer risk, has led to a shift from traditional to synthetic forms of securitisation.


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