Investors back growth in sterling CDS market

There are signs that UK real-money managers with sterling-denominated assets are fuelling demand for a sterling CDS market. Simon Boughey reports

The credit default swap market has nearly doubled in size every year since the International Swaps and Derivatives Association first published data on it in 2001. With a total notional amount of $8.42 trillion outstanding at the end of 2004, that growth represents a 55% increase over the first half of the year alone.

To date, the credit default swap (CDS) market has been overwhelmingly dominated by dollar- and euro-denominated swaps – only 5% of volume in the single-name CDS markets