CDS for China

Reuters: China paves way for credit default swaps as govt girds for more defaults-sources
A Chinese financial committee has proposed new rules for hedging defaults, sources said Thursday, as Beijing aims to buttress financial markets and banks against a surge of bond defaults.

China will move closer to launching credit-default swaps (CDS) for the first time under the recommendations, which were made by the financial derivative committee under the state-controlled National Association of Financial Market Institutional Investors (NAFMII), the sources said.

The committee met recently to amend rules governing the rarely used credit risk mitigation (CRM) market, the only bond default hedging tool in China at present, the sources with direct knowledge of the matter told Reuters.
Wait until the CDS market it hit with a wave of money like the steel rebar futures. Reflexivity gone wild.

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