CDS Market May Boost Bankruptcies

M. S.
June 2008
Bank Loan Report;6/30/2008, Vol. 23 Issue 26, p5
Trade Publication
The article focuses on the impact of credit default swaps (CDS) market on the U.S. banking industry. It notes that CDS holders may not have the same incentive as the other investors to keep companies due to bankruptcies or restructuring. Data shows that the market has grown over the last several years. This suggests that many investors have insurance on their bonds protecting them against bankruptcies and covenant defaults with payment guarantees.


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