On thin ice


Taking an aspirin is an easy way to treat a headache. The potential, unpleasant side-effects - heartburn, indigestion, nausea - are rarely considered. Similarly, when a bank has the headache of excess credit exposure, it often gulps down a credit default swap (CDS) without reading the warning on the side of the packet: credit derivatives can produce painful, unanticipated build-ups of counterparty risk.

That warning could be ignored with impunity while CDS counterparties - predominantly other

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: