Rocked by counterparty risk

Counterparty risk was not always a phenomenon commonly discussed throughout the derivatives market. Before the bankruptcy of Lehman Brothers in September, it was regarded by some as the preserve of back-office boffins and as something entirely separate from the nitty-gritty of the trading floor. But since then, it has swiftly become a hot topic for market participants, creating an elephantine amount of work for trading desks.

"Counterparty risk has gone from something that was lower down the