Has Asia got the appetite for local currency CDS?

The development of a robust local currency credit default swap market in Asia has come a step closer following the first public won-denominated CDS trade in Korea late last year. Alice Hales looks at whether the ingredients are there for such a market to flourish

Large dealers are increasingly bullish about the likely development of a local currency credit default swap market in several Asian countries, including Korea, Malaysia and Taiwan. The current mood is a far cry from concerns reported five years ago that illiquid secondary bond markets, the absence of clear regulations and limited participation by foreign investors would prevent local currency CDS from gaining traction.

But industry stalwarts, notably JPMorgan - seen as the architect of the US and

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