CDS market structure transformed – BIS

Inter-dealer credit default swap (CDS) trades have collapsed over the last nine years, coinciding with the rise of central counterparties (CCPs) which accounted for over half of all bank positions at end-2017.

Data published by the Bank for International Settlements (BIS) shows that inter-dealer positions declined from 26% to 5% from the first half of 2010 to end-2017. Outstanding notionals for these trades have also shrunk faster than the overall market, by 87% compared with 72% in the period