Liquidity Signals in the CDS Markets Jul Mon 26 2010 at 9.04 am
On the day when KfW wired €300m to the defaulted Lehman Bros, it became clear that a new regime for risk control and counterparty risk assessment was required.
On the day when KfW wired €300m to the defaulted Lehman Bros, it became clear that a new regime for risk control and counterparty risk assessment was required.
No longer could the middle office operate in an end-of day or end-of-week environment whilst the front office operated in real-time. There was a requirement to extend dynamic environments from the front office into departments responsible for managing counterparty credit risk.
This article illustrates how an institution can significantly enhance their ability to actively manage their counterparty credit exposures by using CDS market activity information provided by CMA's independent CDS data service. This article will also introduce CMA's market activity indicators, which provide CDS market information that is not contained in CDS price levels but can have a significant and valuable impact on counterparty credit assessment.