Credit default swaps break through fourth wall
Fourth-trigger CDS trading ramps up as more protection sellers enter field
A once-niche corner of the credit default swap (CDS) market seems to be going mainstream.
At least 10 banks are said to be trading so-called fourth-trigger CDSs, which allow them to offload unwanted derivatives counterparty credit risk to investors.
“All major dealers seem to be using it,” says Marcin Perzanowski, a partner in the structured finance and derivatives practice at law firm Simmons &
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