Fourth-trigger CDS market weighs going blind
Dealers see benefit of undisclosed, replenishable pools – but not everyone is convinced
A structure already embraced by the loan market may reshape how banks lay off derivatives counterparty credit risk, as so-called blind pools – undisclosed, replenishable baskets of reference names – creep into the market for fourth-trigger credit default swaps (CDSs).
Like in the synthetic risk transfer (SRT) market, blind pools allow banks to lay off risk on an undisclosed portfolio of reference
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