German trade body publishes CDS to increase transparency

Deutscher Derivate Verband (DDV), the German derivative association, today began publishing credit spreads of certificate issuers in Germany on its website, alongside standard credit ratings. The DDV will now publish five-year credit default swaps (CDS) of the product providers, referenced to corporate bonds and updated on a daily basis.

The German trade body, which is made up of 20 issuers in Germany, has begun publishing the figures in a bid to increase transparency for investors in structured products. Credit default swaps, specifically the basis point insurance premium paid to hedge against default, can potentially help investors to more accurately assess the credit quality of an issuer than ratings alone, according to a statement released by the organisation.

DDV asserts that most investors have not had access to credit