Credit Default Swaps: central clearing yes, exchange trading no

According to BIS figures in notional terms the volumes of credit default swap (CDS) fell by 26.9% in the second halve of 2008 to $ 41.9 trillion. In December 2006 it amounted to $ 28.65 trillion, but then almost doubling to 57.89 trillion at the end of 2007.
The turn-around occurred against a background of severely strained credit markets combined with increased multilateral netting of offsetting positions by market participants. Single-name contracts declined to $25.7 trillion while multi-name contracts, a category that includes CDS indices and CDS index tranches, saw a decrease to $16.1 trillion. According to BIS figures of the total credit default swap volume some 60% were contracts with reporting dealers and 39% with other financial institutions. Non-financial customers held only a mere 1%.

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