Risk amplifiers endanger credit market

High levels of speculation, leverage and securitisation mean the credit market is riskier than it appears, according to research published this month by UK independent financial research company Clear Capital.

The company says credit derivatives volumes are growing far faster than can be justified by the need to manage credit risk, implying high and growing levels of speculation. Derivatives volumes are growing two to three times as fast as underlying credit issuance, and interest rate volatilit

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