German banks relying on CDSs to boost profits

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Contrary to the accepted wisdom that banks tend to be net buyers of credit protection, recent research has suggested that many European banks have in fact taken on more credit risk through the derivatives market than they have transferred.

According to the preliminary findings of a survey conducted by Fitch Ratings on the fast-growing credit derivatives market, European banks overall are net buyers of credit derivative protection, with €65 billion aggregate net purchased.

However, these over

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