Complinet logo
Search
Contact us

IOSCO says jury out on CDS short-selling impact

Jun 18 2012 Huw Jones, Reuters

LONDON, June 18 (Reuters) - There is no firm proof that short-selling credit default swaps (CDS), blamed by some policymakers for exacerbating Greece's debt problem, damages the underlying government bond market, the world's top securities body said. CDS are contracts written by large banks that insure the buyer against a default in an underlying asset such as a government or corporate bond. "There is mixed evidence on the impact of CDS on the orderly functioning of the primary and secondary markets of the underlying bonds and on creditor incentives, although the CDS market is found to have an important role in the price discovery process," the International Organisation of Securities Commissions (IOSCO) said in a report. Leaders of the G20, who meet in Mexico on Monday and Tuesday, asked for the study from IOSCO, whose members include the U.S. Securities and Exchange Commission, Japan's Financial Services Agency and Germany's Bafin. Many European Union politicians argued

Already have an account?

Log in

Want to read this article?

Click here for a free 14 day trial